Caixa has put a €100 million portfolio of bad debt up for sale. Meanwhile, BBVA has €20 million worth of land up for sale. Banks are continuing to clean up their balance sheets. Rating agencies and supervisors are praising the move.
As the end of the year approaches, banks are continuing their efforts to clean up their balance sheets. According to information gathered by ECO from market sources, several portfolios of bad loans and real estate with a total value of approximately €300 million have been put up for sale in recent weeks.
The sector has carried out a major clean-up of its balance sheets in recent years, an effort that has received widespread recognition from rating agencies and supervisors, as Morningstar DBRS pointed out this week. Nevertheless, banks are still trying to dispose of assets that are considered problematic.
Caixa Geral de Depósitos (CGD) is a case in point, with a portfolio of non-performing loans (NPLs) worth around €100 million up for sale. This is an unsecured portfolio, meaning there are no associated guarantees, so the amount receivable for this set of contracts is likely to be lower. The public bank has not commented on this operation.
Another unsecured NPL portfolio worth €170 million is also on the market, but it has not been possible to ascertain the institution that originated this portfolio.
In addition to bad debt, BBVA has also launched a real estate portfolio. Valued at close to €20 million, the portfolio comprises nearly forty real estate assets, primarily land, situated across the country.
Over the last decade, NPL have fallen by more than 15 points.
Ten years ago, NPL were one of the major problems affecting the national banking sector. In 2015, the sector recorded an NPL ratio of 17.5% of total credit — at the height of the banking crisis in Portugal, following the bankruptcies of BES and Banif, and with Caixa en route to recapitalisation.
A decade later, the problem has been solved. In June, NPL accounted for just 2.3% of the total, with the NPL ratio having fallen by over 15 percentage points during this period.
Original Story: ECO | Author: Alberto Teixeira
Edition and translation: Prime Yield