NPL&REO News

Crédito Agrícola sells €93 million in NPL

30 September, 2024

Crédito Agrícola has just put up for sale a portfolio of non-performing loans (NPL) worth €93 million, the majority of which belong to small and medium-sized enterprises (SMEs), according to information gathered by ECO from market sources.

The sale includes a stake of secured operations, i.e. contracts with guarantees, 65 per cent of which correspond to NPL for SMEs, according to the same sources.

An official bank source confirmed that the ongoing market consultation process, which is expected to be completed in 2024, is part of the planned implementation of the strategy to reduce exposure to NPLs.

The group led by Licínio Pina has seen its assets decline recently due to high interest rates. In June, the NPL ratio reached 6.5%, up 0.3% from last year. This is more than double the national average of below 3%.

This was an increase of €36.4 million to 765.3 million, with over half (410.5 million) corresponding to SME NPLs. The portfolio on the market represents approximately 12 per cent of the NPL stock. By the end of June, the total amount of money set aside to cover NPLs was 293.3 million. This meant that 38.3% of NPLs were covered.

Original Story: ECO | Author: Alberto Teixeira
Edition and translation: Prime Yield

HFSF to kick off National Bank stake sale next week

26 September, 2024

Greece’s bank bailout fund HFSF will start the process to sell a stake of up to 12% in National Bank of Greece early next week, two officials with knowledge of the matter have said.

With the planned sale, Greece will conclude the reprivatisation of its banks, which were bailed out during a debt crisis that nearly drove the country out of the eurozone.

“Our plan is to start the process for the sale of 10%-12% on Monday and conclude by Wednesday,” one of the officials told Reuters.

HFSF holds an 18.4% stake in National Bank (NBG), the country’s second largest lender by market value. The remainder will be transferred to the state’s sovereign wealth fund.

“The shares will be offered at a small discount to the current market price,” the official added.

NBG shares were trading at 7.64 euros on Tuesday, valuing a 12% stake at about €900 million.

A second official confirmed the timing of the sale, adding the shares would be sold through a combined offering to institutional investors abroad and to domestic institutional and private investors.

The fund sold its holdings in Eurobank, Alpha Bank, Piraeus Bank and part of its stake in NBG earlier this year and late in 2023.

Original Story: Reuters
Edition: Prime Yield

BBVA continues to shed weight and prepares to sell €600 million in doubtful loans

24 September, 2024

BBVA has kicked off the sale of a portfolio of 600 million euros in non-performing mortgages, a process that is part of the bank’s interest in improving its capital ratio. The entity chaired by Carlos Torres has hired Alantra to carry out an orderly process of these loans, a transaction that is expected to go to market in the coming days, according to Bloomberg. This is one of the largest portfolios that BBVA has brought to market in recent years and, moreover, comes at a critical time for the bank, which is in the midst of a takeover bid to try to acquire rival Banco Sabadell.

The sale of portfolios of doubtful assets is one of the bank’s formulas for freeing up provisions and, with them, improving its capital ratios. A reasoning that seems to be behind both BBVA’s move and the portfolio that Sabadell has also put on the market.

The Catalan entity has put up for sale the third portfolio of doubtful loans it has launched so far this year, a portfolio comprising 380 million euros in unpaid consumer and SME loans. These are unsecured loans, which are usually sold to opportunistic funds at significant discounts. Between 2023 and 2024, BBVA has also placed three portfolios on the market with a total volume of €1,100 million.

Original Story: El Confidencial
Edition and translation: Prime Yield

KKR has put up for sale €700 million of NPL it bought from Novobanco in 2018

23 September, 2024

The KKR fund, which in 2018 won the race to buy a portfolio of problem loans worth €1.75 billion that Novobanco put up for sale, is reselling €700 million euros of that portfolio, dubbed the ‘Nata’ project, Jornal Económico understands.

On the shortlist to submit binding-offers are three candidates: the Balbec – LX Partners consortium; the British fund LCM Partners and Arrow Global.

According to our sources, the binding-offers must be submitted by 2 October.

KKR wants to close down the fund that bought the assets from Novobanco, which is why it went ahead with the sale.

The NPL portfolio that the KKR fund is selling is secured credit, i.e. with guarantees, so the ‘Nata project’ is essentially real estate.

The operation carried out in 2018 involved more than 100,000 credit exposures that were bought by the KKR/LX Partners consortium for €505 million and generated losses of €110 million for the bank, of which around €85 million were covered by the Resolution Fund.

Nata I was Novobanco’s first major packaged sale of NPL (loans at risk). In 2018, when the ‘Nata project’ was sold to KKR, there were two tranches. The first was worth €550 million with loans from 54 large companies, while the second tranche of €1.2 billion concerned NPL from more than 62,000 companies.

Fonte: Jornal Económico | Author: Maria Teixeira Alves
Edition and translation: Prime Yield

Greece plans further €1bn guarantees for Hercules

18 September, 2024

Greece’s request to the EU’s Directorate General for Competition, to be submitted in early October, foresees €1 billion of new guarantees under Hercules III to help banks reduce non-performing loans (NPLs).

The extension of the programme by €1 billion brings to €3 billion the amount of guarantees that the State has provided or intends to provide under Hercules III (from the €2 billion initially approved), while the total guarantees under the three successive extensions of Hercules are estimated to be close to €23 billion.

The Ministry of Economy and Finance has already started exploratory contacts with the relevant EU Directorate for the approval of the additional amount of guarantees.

DBRS estimates the amount of guarantees repaid so far at €2.2 billion out of a total of €19.2 billion guaranteed by the state for 17 securitisation transactions totalling €42.8 billion. Based on the same analysis, the outstanding balance of guarantees was €17 billion at the end of June and, as DBRS notes, “the decrease of around €2.2 billion, or 11.5%, shows that the majority of business plans still need to be worked out.

Original story: Kahtimerini | Author: Evgenia Tzortzi
Edition: Prime Yield

Balbec/LX Partners, LCM Partners and Arrow Global in pole position to acquire BCP’s Project Spring

16 September, 2024

The Balbec – LX Partners consortium, the UK fund LCM Partners and Arrow Global are the three candidates selected by BCP to submit binding offers for the purchase of a €90 million portfolio of non-performing loans (NPL) from the bank headed by Miguel Maya.

The so-called ‘Swift project’, which consists of unsecured NPLs, will receive binding offers on 18 September, according to Jornal Económico.

Earlier this year, BCP sold a €265m portfolio of single names, or loans from major clients in default, known as the Spring project, which our sources say was bought by Arrow Global.

The Balbec – LX Partners consortium, the UK fund LCM Partners and Arrow Global, who are in pole position to buy the Swift project, are the same candidates to buy a portfolio of non-performing loans from the KKR fund, called the Nata project, which consists of the resale of a portfolio bought by Novobanco in 2018, made up of NPLs with guarantees (secured), and whose binding proposals must be submitted on 2 October.

Fonte: Jornal Económico | Author: Maria Teixeira Alves
Edition and translation: Prime Yield

Greece to Complete Bank Privatisations with October Sale of Final Stake

13 September, 2024

Greece is set to finalise its post-crisis bank privatisation efforts by early October with the sale of its remaining stake in the National Bank of Greece (NBG), sources told Reuters.

The upcoming sale will conclude a significant chapter for Greece’s banking sector, which was severely impacted during the debt crisis that nearly pushed the country out of the eurozone. This crisis led to stringent austerity measures imposed by international lenders in exchange for bailout funds.

Currently, the Hellenic Financial Stability Fund (HFSF), established in 2010 to stabilise Greece’s major banks and prevent wider financial contagion, holds an 18.4% stake in NBG. The plan is to sell between 10% and 13% of this stake, with the remainder being transferred to Greece’s sovereign wealth fund.

“The exact stake and timing for the sale will be decided next week,” one source revealed. The HFSF began reducing its holdings last year after injecting around 50 billion euros to support Greece’s top banks during the crisis.

The divestment of HFSF’s stakes in Eurobank, Alpha Bank, Piraeus Bank, and part of its NBG stake is viewed as a positive indicator of Greece’s economic recovery. However, many Greeks continue to experience the lingering effects of the crisis.

The sale of the NBG stake will be conducted through a book-building process and public offering, with JP Morgan advising on the transaction. If demand is strong, the government may opt to sell the full 13% stake.

Original Story: Greek City Times | Author: Reuters
Edition: Prime Yield

Balbec Acquires €4 Billion of Soured Portuguese Loans

11 September, 2024

Alternative asset manager Balbec Capital Management has bought a portfolio worth over €4 billion of soured Portuguese loans from Luxembourg-based LX Partners, according to a statement seen by Bloomberg News.

The portfolio has more than 300,000 restructured and non-performing loans (NPL), and its purchase is one of the largest such loan transactions in recent years, Balbec said. It’s one of the biggest portfolio purchases of NPL for the firm since it was founded in 2010.

About two-thirds of the portfolio consists of unsecured debt, such as loans to small and medium-sized businesses, according to Balbec. The secured portion, which is one-third of the portfolio, consists of residential mortgages and other real estate loans.

Balbec has expertise with “credit-intensive” assets such as NPL, one of the reasons why this portfolio is an attractive purchase, the firm said in a statement. The company is re-entering the Portuguese market with this deal.

There may also be an opening to buy these types of loans now. Other lenders that focus on such loans have lately been preoccupied with refinancing their own maturing corporate debt or are looking for opportunities outside Portugal, the firm said.

“Portugal looks particularly attractive to us now because there’s an ample supply of non-performing and semi-performing loans and less competition on the demand side,” Balbec said in a statement.

Many of the loans were originally made by banks and other lenders before later being sold to LX Partners, which invests in a variety of assets, including performing and non-performing assets.

Going forward, Balbec and LX will jointly work on bids for secured, unsecured and mixed portfolios, with LX providing the servicing, according to Balbec.

Original Story: Bloomberg | Author: Scott Carpenter
Edition: Prime Yield

Major servicers are playing for three big deals worth 45bn over the next 15 months

9 September, 2024

DoValue, Hipoges (KKR) and Anticipa-Aliseda (Blackstone), three of the largest servicers in Spain, have major management contracts due for renewal in Spain before the end of 2025.

Specifically, DoValue’s rights to a Santander portfolio (approximately €20 billion) and Hipoges’ (€14 billion) and Anticipa-Aliseda’s (11,400 million) rights to the Sareb portfolio will expire by that date. In total, around 45 billion, according to figures from Atlas Value Management, which EL ESPAÑOL-Invertia has had access to.

It should be recalled that the management of a Cajamar portfolio, in which Haya Real Estate – now Intrum – held a number of rights, was also due to expire this year. Last July, the Almeria-based rural savings bank announced that it would manage all the assets internally and would not renew the contract with Intrum. Intrum had been managing the assets for 10 years and had a total of 7.4 billion in assets at the time of the crisis.

Once this first round of renegotiations is complete, it will be Intrum, currently the largest servicer in Spain in terms of volume, that will have to put on the overalls.

In 2026, their rights to a €4 billion portfolio from CaixaBank, another €3 billion from BBVA – inherited from Haya – and another €2.5 billion from Ibercaja expire. In 2027, they also have another portfolio from CaixaBank, also inherited from the company acquired in 2023, for €9.600 billion.

Source: El Español | Author: Diego G. Camporro
Translation and edition: Prime Yield

Albatriz buys Portuguese servicer with 500 million in non-performing loans

6 September, 2024

Italy’s DoValue has sold its non-performing loan (NPL) business in Portugal to Sweden’s Albatris, which includes a portfolio of around €500 million in assets under management.

The sale, which began earlier this year and was led by PwC Spain, was completed at the end of last month. Since then, DoValue Portugal, which employs around 60 people, has been renamed Stellarvest and is now enjoying a new lease of life with a new owner but the same management team.

Before being sold to an Albatris vehicle, Stellarvest, as it is now called, underwent a restructuring process to become a ’boutique servicer’, concentrating various asset recovery and management services on complex and troubled assets acquired from banks in recent years.

It now offers not only NPL and real estate asset management, but also advisory services (due diligence of NPL portfolios, etc.), servicing and securitisation.

Negative impact of 3 million

For the Italian group, the sale of the Portuguese business had a negative impact of around three million euros, a figure that was already included in the first-half accounts.

However, DoValue points out that the exit from the Portuguese market “will reduce its financing needs for a unit that was operating on a small scale with limited growth prospects, taking into account the context of the NPL market in Portugal”.

The Portuguese company’s accounts show a decline in turnover in recent years: from 21.5 million euros in 2019 to around five million last year, according to the InformaDB platform. It closed 2023 with losses of 6.6 million euros and negative equity of 4.2 million.

Original Story: Eco | Author: Alberto Teixeira
Edition and translation: Prime Yield

Consumer credit grows by 30 per cent in the first half of the year

5 September, 2024

Consumer credit had been expanding at a 30% clip during the first half of the year, boosted by strong consumer demand and car sales, up 6.5% during the first six months of 2024.

Bank data show that disbursements of consumer loans nearly reached €650 million during the first half compared to €500 million during the same period in 2023.

Banks expect the figure to remain stable during the second half and reach €1.3 billion for the whole year, up from €1 billion in 2023.

Consumer loans were notoriously popular during the period, in the early and mid-2000s, that preceded the financial crisis. After tanking for several years, they once again reached the level of mortgages in 2023.

Of all consumer loans, 50% are simple loans concluded with banks, 30% concern buying a car, and the rest are concluded directly with retailers.

In the loans concluded with banks, the average loan is nearly €6,000, payable within four years. Car loans average €11,500, payable in 4.5 years, while loans from retailers are both much smaller and shorter-term, averaging €800 and payable in 1.5 years.

But the latter category is the fastest-growing because approval is immediate, provided – and this is the difference from 20 years ago – that the retailer accesses the borrower’s tax and credit history.

Besides buying a car, most consumer loans are used for renovations and buying household equipment. Many parents also borrow to cover the costs of their children’s studies, accommodation and spending, mostly abroad.

Original Story: Ekathimerini | Author: Evgenia Tzortzi
Edition: Prime Yield

More than 40 per cent of Brazil’s adult population is in arrears

3 September, 2024

Default affects 41.25 per cent of Brazil’s adult population, or 67.98 million consumers. The figure refers to the July 2024 indicator of the National Confederation of Shopkeepers (CNDL) and the Credit Protection Service (SPC Brasil). The percentage of defaulters also increased by 0.38 per cent compared to the same period last year.

The most significant number of debtors in July was in the 30 to 39 age group (23.67 per cent). According to the estimate, there are 16.77 million people registered as debtors in this age group, which means that half (49.31 per cent) of Brazilians in this age group are in debt.

In July, each negative consumer owed an average of R$4,358.95 in all their debts. In addition, each defaulter owed an average of 2.10 creditor companies, considering all these debts.

The number of debts in arrears in July grew by 2.25 per cent compared to the same period in 2023. The figure for the seventh month of this year was higher than the annual variation seen in the previous month. Even so, from June to July, the number of debts fell by -0.57%.

Original Story: Exclusivo | Author: Michel Pozzebon
Edition and translation: Prime Yield

CPPIB puts Spanish distressed debt portfolio up for sale

2 September, 2024

Canada Pension Plan Investment Board (CPPIB) has put a portfolio of distressed Spanish loans up for sale, as the fund works to reduce its exposure to the country built up during the financial crisis last decade.

The sale comprises loans with a face value of around €300 million in unsecured, non-performing loans, according to people familiar with the matter. Canada’s largest pension fund obtained the assets bundled along with a larger portfolio and they will likely be sold at a heavy discount to par, still generating returns, the people said, asking not to be identified discussing private details.

The Canadian pension fund previously acquired substantial debt assets, including real estate portfolios, from Spanish banks such as Banco Santander SA. While working down that exposure, the fund’s broader strategy involves nearly doubling the size of its private credit holdings over the next five years.

Earlier this year, CPPIB had explored the sale of a separate portfolio with a face value of around €1 billion although that process is now on hold, according to people familiar with the matter.

CPPIB declined to comment on the potential sale.

Original Story: BNN Bloomberg | Author: Jorge Zuloaga and Paula Sambo
Edition: Prime Yield