NPL&REO News

Greece

NPL reach a 15 year low

They may not have “zeroed out” the “red” loans under their control, but non-performing loans (NPLs) in Greek banks are certainly at a fifteen-year low. The NPL rate of 4.6% recorded in the third quarter of 2024, according to official data from the Bank of Greece, not only confirms the very positive evolution of the out-of-court mechanism, but also presents a better picture even before the crisis, as this indicator stood at 5.2% in 2007.

Taking advantage of “Hercules III”, which has been extended until June this year with a “dowry” of another billion from the original budget, Greek banks plan to further lower the bar on “bad” loans in the first months of 2025, thus planning to securitise with the 3 billion guarantees of the new “Hercules”.

Of course, one of the main problems of the market, which is often discussed, is the management of “bad” loans, which have left the banks’ balance sheets but remain in the economy until they leave the management companies (servicers), as regulated or written off.

The out-of-court mechanism, one of the life-saving tools in the management of private arrears, has begun to bear significant fruit in the overall picture of the market, following the improvements it has received.

Original Story: Banks.com | Author: Newsroom
Edition and translation: Prime Yield

banknotes fotoblend

DoValue signs two new mandates totalling €1.6 billion

DoValue Spa has secured two new mandates in the Hellenic region through its subsidiary, DoValue Greece Loan and Credit Claim Management Company, totaling €1.6 billion.

The first is a new mandate to manage the entirety of a portfolio of proprietary funds managed by affiliates of Fortress Investment Group and Bain Capital. The portfolio represents the second of three tranches of the “Alphabet Project” in Greece, a portfolio with a total value of approximately €5 billion after the first tranche was awarded.

The Alphabet Secured Retail portfolio, for which doValue has been appointed as the sole and only servicer, includes gross book value of approximately €1.4 billion and total credit of approximately €2.8 billion that covers about 17,000 borrowers and is backed by real estate collateral real estate.

In addition, a new NPL contract worth approximately €200 million gross book value was signed in Cyprus.

These contracts mark a significant start to the new year for the group, with €1.6 billion of GBV from new mandates after exceeding the target for new business in 2024, chart the positive path taken by doValue and reinforce its confidence in achieving the growth and profitability targets set out in the 2024-2026 Business Plan,” the company wrote in the released note.

Original Story: MarketScreener | Author: Alliance News
Edition: Prime Yield

EOS Partners leads the bidding for the ‘Solaris Project’ from Servdebt

From the list of candidates for the purchase of the ‘Solaris Project’, EOS Partners has made the highest bid for the portfolio of non-performing loans (NPL) in Portugal and will therefore win the portfolio of problem assets.

According to sources close to the process, EOS stood out from the other bidders with a bid of €85 million, while the other candidates submitted bids of between €63 million and €66 million.

LCM Partners, Cerberus, Balbec-Lx Partners and NorthWall Capital were also in the running.

In Portugal alone, the value of the NPL portfolio was €870 million. In Spain, the Portuguese servicer put a portfolio of €480 million up for sale.

The ‘Solaris project’ in Portugal consists mainly of loans to individuals totalling €620 million and loans to SMEs totalling €200 million, with an average loan size of six thousand euros.

It is a secondary market operation, competing in the market with other NPL portfolios of major banks such as CGD, Crédito Agrícola, Novobanco, Santander Totta, BCP, Banco Montepio and Bankinter/Universo.

Servdebt, the Portuguese asset management and recovery company, has mandated Alantra to sell its own portfolio of NPLs in the Iberian Peninsula totalling €1.350 billion. The portfolio consists mainly (but not exclusively) of unsecured loans.

Eon Partners is a US-based alternative investment firm that invests in private equity, credit and capital markets.

Original Story: Jornal Económico | Author: Maria Teixeira Alves
Edition and translation:te: Prime Yield

Unicaja

Unicaja sells €100 million REOs to GCBE (Cerberus) and Luxembourg fund SRPO

Unicaja has completed another sale of non-performing assets. The bank has agreed to transfer a real estate exposure (REO) of around €100 million to GCBE Advanced Solutions, a Cerberus servicer, and the Luxembourg-based SRPO Fund. This is the Ulysses portfolio, which according to market sources consists mainly of residential assets with some commercial property.

The figure represents approximately 9.7% of the total volume of foreclosed assets (REOs) held by the institution on its balance sheet. This exposure stood at €1.030 billion gross at the end of September, down 35.5% from €1.597 billion twelve months earlier.

The Bank’s total exposure to non-performing assets amounted to €2.379 billion, as it includes a further €1.348 billion gross in doubtful loans, the balance of which fell by 22.4% year-on-year in September, contributing to a parallel fall in the NPL ratio from 3.4% to 2.8%.

9.7% of ‘brick’ loans

Unicaja, like most banks, has repeatedly resorted to these divestments in order to improve the quality of its balance sheet and transfer the management of non-performing assets to specialised companies.

Since 2015, it has divested more than €3.6 billion in portfolio sales of all types of problem assets. Between January and September last year alone, it made similar sales worth €267 million and realised €8.5 million in capital gains, thanks to the high provisions on such assets, according to its latest financial report.

Of this year’s sales, 43% were residential properties, 27% were land and 30% were tertiary assets and work in progress. These figures do not include the transaction formalised in December with GCBE and SRPO Fund (Spanish Residential Property Opportunities Fund).

At the beginning of the year, the Bank sold €200 million of property assets in the Minotauro project to the Luxembourg Telesto fund and the French Tikehau Capital fund. With Cerberus, it has completed various operations such as the Centauro project, a portfolio of 100 million in real estate assets agreed in 2023, after transferring a similar portfolio for 200 million to the fund and Deutsche Bank in 2022, or another portfolio of 1,000 million in bricks and NPL acquired by Cerberus with the Davidson Kempner fund in 2019.

Unicaja has accelerated the disposal of toxic assets after a strong provisioning effort, and today its NPL are well below 3.4% of the banking sector as a whole. It has a provisioning buffer that covers 69.8% of the total portfolio of non-performing assets, up from 66.2% in September 2023.

Both investors are consolidating their positions. GCBE Advanced Solutions is emerging as one of the major servicers, with more than €25 billion in assets under management, after completing several transactions last year, including the purchase of Zolva’s Spanish and Portuguese business and the acquisition of Hoist’s NPL macro portfolio, in the latter case together with Intrum.

Original Story: El Economista | Author: Eva Contreras
Edition and translation: Prime Yield

Servdebt

Servdebt acquires 80 million NPL portfolio from Abanca

Servdebt Capital Asset Management has completed the purchase of a portfolio of non-performing loans (NPLs) from Abanca, dubbed the ‘Gaia Project’. This is a portfolio of approximately €80 million of NPLs that were on the balance sheet of Abanca in Portugal.

The ‘Gaia Project’ is a portfolio of unsecured loans to individuals and small and medium-sized enterprises owned by Abanca.

The transaction was completed in December.

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

Abanca PT

Abanca places €140 million in NPL and refinanced loans with Balbec and Servdebt

Abanca is removing new non-performing assets from its balance sheet. The bank will transfer around €140 million in two separate operations, including healthy loans that have suffered some incidence in the last year and other financing with defaults. On the one hand, the bank has sold €60 million in refinanced and restructured mortgages (reperforming in the jargon) to the American fund Balbec Capital. In Spain, the transaction is a continuation of the Xallas project, in which it transferred to the same fund a portfolio of similar assets with a total gross nominal value of almost €80 million.

In Portugal, it is also finalising the transfer of a further €78 million of unsecured NPL to Servdebt Capital Asset Management, an Iberian asset management and recovery company. This is the so-called Gaia project or operation.

Some twenty disposals

So far this year, the Bank has also completed the placement of a €60 million portfolio of unsecured NPL to Poland’s Kruk, in the Ezaro portfolio. In recent years it has completed around 20 similar sales to KKR, EOS Spain and the US fund CarVal Investors, among others.

Abanca has been particularly active in the reperforming credit segment, completing five transactions in just four years. This is an asset class that is becoming increasingly important in a market dominated by unsecured NPL, now that banks have moved on from the massive real estate outflow.

The portfolio transferred to Balbec comprises outstanding mortgages with private individuals secured on residential properties throughout Spain. It has been structured for sale by securitisation, with the bank retaining the management of the ‘healthy’ loans and transferring them to a servicer when they become non-performing.

The segregation of non-performing assets and their subsequent sale is part of the routine management of institutions to improve the quality of the balance sheet and to transfer debt collection to specialised companies, thus freeing up their teams from these functions.

In the case of Abanca, the clean-up of the balance sheet has gone hand in hand with the integration of other banks during its acquisition spree. The latest was Eurobic, which was completed last July. But since Banesco entered Spain in 2012 with the purchase of Banco Etcheverría and the acquisition of Novagalicia Banco (now Abanca), the group has added Popular Servicios Financieros, Deutsche Bank’s Portuguese operations, the Spanish operations of Caixa Geral de Depósitos and Novo Banco, Bankoa and Targobank.

At the end of September, its NPL ratio was limited to 2.6%, at 1,312 million, with provisions of 1,024.9 million and 78.1% of impaired assets. If Targobank and Eurobic are excluded, the ratio is even lower at 2.3%.

Its exposure to foreclosed assets is also very limited, at 433.13 million at the end of September, barely 0.2% of the group’s balance sheet and backed by provisions covering 63.3% of the risk.

Original Story: El Economista | Author: Eva Contreras
Edition and translation: Prime Yield

Serasa: Number of people in debt in the country reaches 73 million

The latest survey by Serasa shows that at least 73.10 million people in Brazil are in debt. The figures are for October and are the second highest of the year, after the figure recorded in April. For the organisation, the figure is an indication that the number of people in arrears is increasing.

According to the survey, Brazilians between the ages of 41 and 60 represent the largest share of the population with a restricted name, at 35.1 per cent. This is followed by the 26 to 40 age group (34.0 per cent), the over 60s (19.2 per cent) and young people aged 18 to 25 (11.8 per cent).

Original Story: Agência Brasil | Author: Flávia Albuquerque
Edition and translation: Prime Yield

Banks reduce NPL ratio to 3.41%, lowest since 2008 crisis

The Bank of Spain has confirmed that non-performing loans (NPLs) fell by €291 million in a single month, bringing the total to €40.163 billion.

The NPL ratio of Spanish banks continued to fall in October to 3.41%, two tenths less than in September and almost two points lower than a year ago, when it stood at 3.60%, the lowest level since the end of 2008. In total, the volume of doubtful loans reached 40.163 billion euros, 291 million euros less than the previous month and a reduction of 2.226 billion compared with October 2023, according to provisional data published by the Bank of Spain.

The main reason for this decline is the renewed fall in NPLs – the aforementioned 291 million – which allowed the NPL ratio to fall despite the credit portfolio falling to 1.177 billion euros, compared with 1.179 billion euros at the end of September. However, the loan book increased by €1 billion year-on-year.

The supervisor also published the aggregate NPLs of banks, savings banks and cooperatives (rural banks) on the one hand and consumer finance companies on the other. The NPL ratio of banks, savings banks and cooperatives fell from 3.32% in September to 3.30% in October, also the lowest rate since December 2008, after the NPL balance fell by 309 million to 37.111 billion euros.

October’s NPL ratio of 3.30% is also lower than the 3.48% of the same month in 2008, after the NPL balance fell by €2.127 billion since then.

Financial institutions saw their NPL ratio rise to 6.68% in October, some 20 basis points higher than in September. Compared with October 2023, however, it fell by 25 basis points. In absolute terms, the volume of doubtful loans of this type of institution stood at EUR 2.880 billion at the end of October, 19 million more than in September. Compared with the same month of the previous year, the doubtful balance was 94 million euro lower.

Original Story: La Razón | Author: Javier de Antonio
Edition and translation: Prime Yield

Servicers’ NPLs grow to over 70 bln euros

In the third quarter of 2024, the nominal value of loans to the domestic private sector serviced by domestic credit servicing firms (CSFs) that have been transferred to non-resident specialized financial institutions increased by 1.012 billion euros, according to the latest figures released by the Bank of Greece.

The total value of loans serviced by domestic and foreign CSFs increased to €70.78 billion at the end of the second quarter of 2024, from €69.79 million in the previous quarter.

The nominal value of serviced corporate loans increased to €23.15 billion in the third quarter of the year, from €22.79 billion the previous quarter.

In further detail, the nominal value of loans to non-financial corporations (NFCs) increased by €367 million to €23.12 billion at the end of the third quarter.

Out of the total of these loans to NFCs, an amount of €11.1 billion corresponds to loans to small and medium-sized enterprises (SMEs).

The nominal value of loans to other financial institutions serviced by CSFs increased by €1 million at the end of the third quarter of 2024.

Original Story: Ekathimerini
Edition: Prime Yield

Novobanco sold NPL portfolio for €30.7 million

Novobanco has entered into a Non-Performing Loans (NPL) Sale and Purchase Agreement, without guarantees (unsecured) and related exposures (assets).

The announcement was made in a statement and the bank says that the contract was signed following the conclusion of a competitive sale process.

The completion this transaction, under the agreed terms, should have a positive impact on asset quality ratios, reducing the amount of NPLs by around €100 million and the gross NPL ratio to approximately 3.5 per cent (proforma to December 2024), reveals the bank led by Mark Bourke.

‘This is a significant milestone for Novobanco, enabling it to fulfil its strategy of convergence towards the EU average,’ in terms of the ratio of NPL to the total portfolio.

The transaction, carried out for 30.7 million euros, should have a positive impact on the 2024 income statement, contributing around €6 million to Pre-Tax Results and resulting in a 6 basis point increase in Capital Ratios.

The buyer and the name of the portfolio has not been disclosed.

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

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