Recovery, Itaú Unibanco’s credit recovery company, acquired over R$ 4 billion (bn) in Non-Performing Loans (NPLs) portfolios – the so called bad debt – from Bradesco. This is the second time that the company acquires operations from the financial institution, underlining its independence, which was questioned after the company changed hands from BTG Pactual to Itaú. The operation, whose winner was selected last 9thJune, is to be completed during the current month (June), allowing Bradesco to account it in its balance sheet on the 2nd quarter. However, being overdue loans with an average two to ten-year term, this won’t ben producing effects in the Banks results.

Since Bradesco started to dispose bad debt – a strategy that was not an option for this institution previously to the country’s recent crisis and before purchasing HSBC –, the bank has already disposed about R$ 20 billion in NPLs. In the 1st half of 2018, alone, more than R$ 9 billion were transacted. As the bank seems to prefer this strategy and, unlike its competitors, still does not consider to have its own credit recovery company, the market is now expecting Bradesco to put on sale a similar NPL volume over the second half of the year, boosting the transaction of NPLs portfolios in Brazil. The bank is, however, reserving information about the volume to come into the market. Bradesco and Recovery prefer not to comment on this information.

Original Story: Estadão/Economia (Coluna do Broadcast)
Photograph: Itaú
Translation and Edition: Prime Yield