The end of the year brought unusual turmoil to the non-performing loan (NPL) market in Portugal. At least seven banks are in the process of selling portfolios of toxic loans worth EUR 1.3 billion, according to information gathered by ECO from various market sources.
These transactions should be completed by the end of the year, one of the sources said. This is in line with the opinion of several analysts consulted by ECO: banks are making a last-ditch effort to clean up their balance sheets before the 2024 accounts are closed.
The biggest operation is by Caixa Geral de Depósitos (CGD), which has put up for sale a portfolio of unsecured NPL worth EUR 460 million under the name Projeto Moon.
Crédito Agrícola has two NPL sales processes underway with a total value of around EUR 280 million: Projeto Lyra, worth EUR 93 million of secured loans and Projeto Leo, worth EUR 183 million of unsecured loans.
The Crédito Agrícola group is the one that is lagging behind in reducing bad debts (compared to its peers) and is now more active in the market to try to catch up. An official source confirmed that ‘it has sales processes underway that are at an advanced stage, aimed at reducing exposure to NPLs and expected to be completed in 2024′. The ongoing processes are part of the planned implementation of the strategy to reduce exposure to NPLs and will be accompanied by other complementary measures to reduce exposure,’ the bank said.
Novobanco is selling a NPL portfolio worth EUR 250 million.
Santander Totta has a large single-name portfolio on the market called Summer, worth EUR 160 million. According to a source, the bank is likely to abandon this transaction.
Banco Montepio has also launched Projeto Sado, a portfolio of unsecured NPL worth EUR 68 million.
With smaller portfolios, BCP and Bankinter/Universo were put up for sale.
The NPL ratio in the national system fell from a high of 17.5 per cent in 2015 to less than 3 per cent at the end of June. But there were still EUR 8.5 billion in NPL, according to the latest figures from the banking regulator.
Original Story: ECO | Author: Alberto Teixeira
Edition and translation: Prime Yield