Portugal’s BCP bank has completed the sale of the nonperforming loans (NPL) portfolio named “Project Lucia”, made up of bad loans with a nominal value of 60 million and real estate assets worth 50 million euros. According to Jornal Económico, the buyer was LX Partners (in partnership with Cabot).

BCP will continue its efforts to clean up its balance sheet. “We will continue to go to the market and carry out operations”, said Miguel Maya when asked if they were going to sell NPL portfolios once again.

The bank recorded a 543 million euro reduction in Non-Performing Exposure (NPE) by 2021, with a 485 million euro reduction in domestic activity. This reduction in NPE, gives “continuity to the successful strategy of disinvestment in NPE implemented by the Bank in recent years”, says the institution.

The group’s NPE ratio for loans and advances to customers stands at 4.7%. In the results presentation, the bank revealed that by 2021 the NPE ratio as a percentage of the total loan portfolio continued to evolve favourably, having decreased from 5.9% at the end of 2020, to 4.7% at 31 December 2021, highlighting the contribution of domestic credit, whose NPE ratio fell from 6.1% to 4.7% in the same period.  Also with regard to coverage indicators there was a general improvement in the last year (to 68%), highlighting the performance of the activity in Portugal, whose degree of NPE coverage by impairments, increased from 63% at the end of the previous year, to 68.5% at 31 December 2021.

Regarding the net portfolio of properties received through recovery, it decreased 32.8% between December 2020 and December 2021.

The value of the portfolio, calculated by independent valuers, is 32% above its book value, the bank said.

BCP sold 1,677 properties in 2021 (2,414 properties in 2020), with the sale value exceeding the book value by 22 million euros.

The bank posted annual profits of 138.1 million, down 24.6% on the previous year. BCP’s return on equity remained very low and far from the management’s target. In 2021 it did not exceed 2.4%, well below the cost of capital.

Original Story: Jornal Económico| Maria Alves 
Photo: Millennium bcp website
Translation & Edition: Prime Yield