NPL&REO News

Bank of Spain Flags €8.2 Billion in COVID Loan Guarantees as “Doubtful”

10 October, 2025

The Bank of Spain is monitoring around €8.2 billion in pandemic-era loan guarantees issued by the state-owned Instituto de Crédito Oficial (ICO), considering them at high risk of default, El Mundo reported.

According to the central bank’s latest Financial Stability Report (May 2025), roughly 9% of ICO-backed COVID loans are now classified as “doubtful,” meaning they may never be repaid. Another 8% remain under “special monitoring,” where credit risk has significantly increased.

The ICO program, launched in 2020 with up to €140 billion in state guarantees to support businesses, ultimately backed about €92 billion in loans. Defaults have already cost public finances €2.1 billion as of the end of 2024, and potential future losses could lift that figure beyond €8.6 billion.

Some of these losses may be offset by fees banks paid for the guarantees—estimated at around €2 billion—but the Bank of Spain warns the total cost could still exceed earlier projections by the fiscal watchdog AIReF, which in 2021 expected around €6 billion in bad loans.

Despite a decline in loans under special monitoring last year, the number of doubtful loans rose by 7.5%, prompting the Bank of Spain to continue close supervision of pandemic-related credit exposure.

Foto de J Shim na Unsplash

Original Story: El Mundo | Author: Alejandra Olces
Edition and translation: Prime Yield

Greece’s bad-loan front remains open according to Moody’s

9 October, 2025

International rating agency Moody’s describes Greece’s credit conditions as a thorn in the side of Greece’s credit rating, as while they have improved in recent years, they remain negative, with significant challenges on the lending front affecting the prospects of the economy and banks.

Despite the fact that banks have offloaded these nonperforming exposure (NPEs), they continue to remain in the system, while new loans are being issued that have not been tested in the economic cycle, as it points out.

Moody’s notes that credit conditions in Greece, which it rates as negative, have improved in the last three to four years, with a significant reduction in banks’ NPEs, which, however, remain higher than those of European bonds.

As it says, banks’ NPEs have decreased to 6 billion euros, or 3.8% of total loans (according to March 2025 data), from €47.2 billion (or 30% of loans) in December 2020.

Nevertheless, Moody’s points out that approximately €78.3 billion of nonperforming loans (NPL), which concern both households and businesses, remain in the hands of servicers and therefore affect the overall assessment of credit conditions in Greece.

The significant reduction in total credits reflects the removal of non-core assets from banks’ balance sheets, the securitization/sale of NPE portfolios and write-offs, Moody’s says.

Greek banks, however, have started to grant new loans, aiming to capitalize on the economic recovery and the positive effects of the Recovery Fund. According to the Bank of Greece, the net credit flow between June 2024 and June 2025 was significant, around €12.6 billion, it said.

“However, this new lending to the real economy, which mainly includes corporate loans as households continue to deleverage, has not yet been tested in a full economic cycle. This factor leads to the negative adjustment to our assessment of credit conditions in Greece,” Moody’s notes.

The agency, however, estimates that any potential risks to vulnerable borrowers are expected to be offset by the resilience of the business sector and new loans related to Recovery Fund projects, which will help banks’ performing loan portfolios continue to expand.

Original Story: Ekathimerini | Author: Eleftheria Kourtali
Edition: Prime Yield

Bank Asset Quality Remains Solid Despite Declining Profitability

6 October, 2025

Portuguese banks continue to show robust asset quality, even amid falling profitability and pressures on financial margins caused by interest rate cuts by the European Central Bank (ECB).

According to the Bank of Portugal report, cited by ECO, the non-performing loan (NPL) ratio remained stable at 2.3% in the second quarter of 2025, while the net impairment indicator slightly decreased to 1%, signaling an improvement in credit quality.

By segment, the NPL ratio for non-financial corporations remained at 4%, while housing and consumer loans saw small declines, to 1.1% and 6.1%, respectively. At the same time, impairment coverage strengthened: rising to 61.3% for non-financial corporations, 36.9% for housing loans, and 61.2% for consumer and other loans.

The cost of credit risk remained historically low at 0.1%, reflecting lower expected credit losses. Capital ratios also remained solid — 20.4% total and 17.9% CET1 — well above the minimum required by European regulations.

In summary, despite declining profitability and margin compression, the Portuguese banking sector maintains a high-quality asset base and comfortable capitalization levels, which, according to the Bank of Portugal, enhances the resilience of banks in the face of the new monetary cycle.

Original Story: ECO | Author: Luís Leitão
Edition and translation: Prime Yield

Sabadell sells €435M in NPL to strengthen balance sheet amid BBVA takeover bid

3 October, 2025

The Catalan bank accelerates sale of non-performing loans and mortgages as part of its strategy to improve asset quality, says El Confidencial.

Banco Sabadell has recently completed the sale of approximately €435 million in loans, according to sources cited by Bloomberg. Spain’s fourth-largest bank is currently advancing a project known as “Project Medusa,” which involves the disposal of €260 million in unsecured loans.

These transactions are part of Sabadell’s broader strategy to clean up its balance sheet. The bank has ramped up its divestment of troubled assets as BBVA continues its takeover attempt, which saw a revised offer last week — a roughly 10% increase — in a final effort to close the deal after more than a year of negotiations.

BBVA is now proposing one ordinary BBVA share for every 4.8376 Sabadell shares, valuing the Catalan lender at around €17.1 billion — about a 2% premium over Sabadell’s market value as of last Friday.

A notable transaction within this clean-up includes the sale of €100 million in non-performing mortgages to Axactor ASA. Four additional smaller portfolios, each worth approximately €20 million, were acquired by firms such as Balbec Capital and Hipoges, the latter backed by KKR.

Original Story: El Confidencial
Edition and translation: Prime Yield

Hercules loans slowly making way to banks

2 October, 2025

Servicer doValue is paving the way for banks to repay part of the guarantees given by the Greek government in the context of the Hercules securitizations through the sale of two loan portfolios.

These are loans from Eurobank’s Cairo securitizations that were securitized through Hercules – that is, they were sold to doValue and have now been streamlined – i.e. they are being serviced.

Their transfer by the investors who had purchased these loans will allow the repayment of the guarantee given by the government through the issuance of senior notes, thus reducing the burden on the public debt. The senior notes are held by the banks on their balance sheets, which, in turn, once the transaction is implemented, will repay the government the guarantee corresponding to these loans.

The portfolios for sale are the Alexandria portfolio, worth 1.5 billion euros, which includes regulated loans of 2,700 large and medium-sized enterprises, and the Giza portfolio, worth approximately €200 million, which includes mortgage loans that are now considered serviced.

The two portfolios will be transferred to investors, to whom the relevant information has already been sent in order for them to express interest and then submit binding offers. The process is being run on behalf of doValue by doAdvice (a subsidiary of the Italian doValue Group) and the goal is to close the transactions by the end of the year.

The transfer of these loans to a third-party investor in turn paves the way for their return to the banks, which is the ultimate goal.

Revealing the importance that banks attach to the return of these loans is an analysis by the National Bank of Greece, which raises to €40 billion the loans that currently belong to funds and could gradually return to the market in the coming years, either as “cured” or as a mechanism for new financing, strengthening credit expansion.

According to National, cleaning up the balance sheets of Greek banks can offer a significant opportunity for new credit, as the loans managed by the servicers or the guarantees that these loans carry, namely real estate, will gradually begin to return to the market and to a healthy economy.

Original Story: Ekathimerini | Author: Evgenia Tzortzi
Edition: Prime Yield

Indotek buys major Spanish NPL property portfolio

23 September, 2025

Indotek Group, the Budapest–headquartered European real estate investment and asset management company, has acquired a diversified portfolio of 524 residential and commercial properties in Spain. The portfolio was acquired in a structured transaction comprising NPLs and real estate asset

The acquisition marks a strategic step in Indotek Group’s Iberian expansion and builds on over a decade of experience in European NPL and distressed asset transactions, targeting high–potential assets across multiple sectors.

Daniel Jellinek, CEO of Indotek Group, commented: “The acquisition is an important step in our strategic expansion in Western Europe and complements our existing portfolio in Spain. It also adds to Indotek Group’s successful track record in executing complex NPL and distressed asset deals with international partners and offers the opportunity to apply our value creation approach to underperforming portfolios.”

The acquired portfolio has a current market value of approximately EUR 43.5 million, with over 90% comprising residential assets, including 307 apartments and 89 houses, complemented by ancillary units such as parking spaces, outbuildings, and select commercial properties.

The portfolio is geographically diversified across Catalonia / Cataluña (40%), the Community of Madrid / Comunidad de Madrid (18%), the Community of Valencia / Comunidad Valenciana (15%), and Andalusia / Andalucía (11%).

Michael Reinmuth, Head of Transactions for Spain and Portugal at Indotek Group, said: “The transaction expands our Iberian presence beyond hotels and shopping centers, adding scale in residential and NPL assets with clear value–creation potential.”

Indotek is cooperating with Redwood, a local partner recently acquired by BCM Global, in evaluating, pricing, and clearing the portfolio and is actively exploring further NPL and distressed asset opportunities in Spain. In parallel, the Group is assessing new pipeline deals across Portugal, Italy, and selected Central European markets, aiming to leverage its established cross-border asset management and servicing capabilities.

“This deal marks a milestone in our international NPL strategy. After 18 months of preparation, it puts us on the Spanish NPL map with a transaction of significant scale and complexity,” added Anna Vavrinecz, Director of NPL Investments at Indotek Group.

Indotek Group is an established player in the Spanish real estate market, with a portfolio valued over EUR 230 million spanning hospitality, retail, and now residential and mixed-use assets. Its holdings include retail properties such as Espacio León shopping center in Castilla y León (acquired from Blackstone in 2024), Vilamarina in Barcelona, and Pueblo Bonaire Factory Outlet in Valencia. Its hospitality portfolio comprises seven seaside hotels with more than 1,680 rooms.

The transaction reflects Indotek’s European investment strategy, focused on revitalizing underperforming assets, diversifying cash flow, and pursuing value-add opportunities across its 12-country footprint.

The transaction was advised by DLA Piper (legal) and KPMG Madrid (financial) for Indotek Group. Alantra acted as the sell-side advisor, supported by Dentons London and Cuatrecasas Madrid as legal counsel.

Original Story: PR Newswire| Author: Indotek Group
Edition: Prime Yield
Image: Indotek Group

More than 13,800 houses listed on banks’ and servicers’ platforms

22 September, 2025

More than 13,800 vacant houses belong to banks and servicers from foreclosures.

The need to channel a large number of properties into the market is greater than ever, as limited supply is driving rental and purchase prices sky-high. In this context, banks, real estate management companies and the government are seeking to put more than 13,800 homes on the market to provide some “relief” to the housing crisis facing Greece, particularly in major urban centers.

Specifically, the sharp imbalance between supply and demand in the real estate market has led to rental prices increasing by 10.9% in just one year, while the overall housing sector rose by 6%, according to ELSTAT data.

This problem is further exacerbated by nearly 800,000 vacant properties, which remain unused. Of these, more than 25,000 belong to banks and real estate management companies, coming from foreclosures, and essentially constitute a “burden” for them as long as they remain idle.

Indeed, discussions have already taken place regarding the possibility of deferring the costs of legalizing these properties so that payment is not a prerequisite for their use. It is estimated that out of the 25,000 properties of all categories, around 13,800 are homes and apartments, with a total estimated market value exceeding €6 billion.

Bank-owned properties

All systemic banks, as well as Attica Bank, maintain at least one real estate platform, either managing the properties directly or operating as digital real estate agents.

The National Bank has two real estate platforms with different functions. The first is RealEstateOnline.gr, which provides access to properties owned by the bank, such as residences, plots, shops, offices, etc. It also provides access to the electronic auction platform for properties and movable assets, where customers can participate in auctions and request guarantees via internet banking.

The second platform is Uniko, the new digital real estate sales platform, operating as the first digital real estate agent in Greece with the support of the National Bank (49% stake). Its services range from finding a home, legal due diligence, certification and appraisal, to financing through the National Bank and digital contract completion.

Piraeus Bank, through Piraeus Real Estate, manages pbre.gr, where interested parties can find high-value properties, both residential and commercial.

Alpha Real Estate Services, part of Alpha Bank, manages and exploits properties owned by the bank and third parties, providing comprehensive services such as valuations, sales, leases, property management and project coordination. In addition, it has a presence in Southeastern Europe through subsidiaries.

At the same time, Alpha Property Management and Investments S.A., a group company founded in 2018, undertakes the valuation, management, utilization and sale of properties acquired by the bank mainly through non-performing exposures (REOs).

Eurobank’s findyourproperty.gr platform offers easy property search and support from experienced partners, as well as financing proposals to complete the purchase. It lists residential, commercial and investment properties such as homes, plots, shops, offices, warehouses, buildings and hotels.

The bank has also invested in the digital platform Prosperty, which creates integrated digital real estate ecosystems aimed at increasing transparency, speed and efficiency in property promotion and sales.

Attica Bank clients who are beneficiaries of the “My Home 2” program have access to properties ready for transfer from the portfolio of Resolute Cepal, through a recent collaboration of the two entities.

In addition, they have access to the My Home platform, developed for its clients by Ask Wire, offering customized searches enabling interested parties to locate available properties that meet the program’s requirements.

Platforms from servicers

doValue, Intrum, Cepal and QQuant are the four largest servicers in Greece, managing around 90% of non-performing loans, with a total value of approximately €70 billion.

Altamira Properties is a real estate platform from doValue, offering a comprehensive digital experience of searching for and acquiring properties throughout Greece. The platform targets both investors and individuals, providing easy, user-friendly and interactive property presentation, updates on new opportunities, and access to full property management services.

Intrum operates Intrum REO, which facilitates the management and sale of properties through an innovative business model, leveraging cutting-edge technology and an extensive partner network.

Cepal Group partnered with international company Resolute Asset Management Group to establish Resolute Cepal Greece Group (RCG), which provides comprehensive property management services, consultancy, technical and legal due diligence, as well as strategic planning for their utilization.

Original Story: Business Daily Greece | Author: Ελευθερία Τσιπιτώρη Edition: Prime Yield

Banks Accelerate sale of NPL portfolios due to ECB pressure

16 September, 2025

Spanish institutions have removed bad loans from their balance sheets, and sales are expected to increase in the coming months.

Spanish banks have reduced their non-performing loan (NPL) ratio below 3% for the first time since October 2008. According to financial sources, the European Central Bank (ECB) is pressuring institutions to remain below this threshold, which has driven an increase in the sale of portfolios of doubtful or failed loans (non-performing loans, or NPLs). As of June, Spanish banks reported an NPL ratio of 2.89%, according to data from the Bank of Spain—the lowest level since October 2008. To achieve this, they made a final sprint during the quarter, selling off portfolios and reducing the total volume of doubtful loans to €33.703 billion—€788 million less than in May, and €1.849 billion less than in March.

Although delinquency has long ceased to be a major concern for analysts and investors, the regulator remains closely focused and wants banks to take advantage of the current economic boom to minimize the volume of doubtful loans on their balance sheets. The most direct approach is selling portfolios to opportunistic funds, typically at a discount to the gross value of the loans. In these cases, banks draw from existing provisions or allocate new ones, recognizing losses but improving their balance sheets.

“In the first half of 2025, Spain’s NPL buy/sell market maintained a similar level of activity compared to the same period last year, dominated by unsecured portfolios and growth in the REO (Real Estate Owned) and PL/RPL (performing and reperforming loans, especially secured) segments. The increase in PL/RPL transactions indicates a growing appetite for lower-risk assets with higher recovery potential, likely tied to economic improvement and falling delinquency rates. Based on information from leading financial advisors—who are aware of projects launching after September—we expect a similar level of market activity in the second half of 2025,” explains Augusto Piñel, partner at Gómez-Acebo & Pombo.

Among the banks making strong efforts to reduce NPLs is Banco Santander, which ended June with a ratio of 2.91%, down from 2.99% in March and 3.05% in December. Sabadell also improved, dropping from 3.21% a year ago to 2.47%. Excluding TSB—which it sold to Santander (with the deal expected to close in 2025)—the figure fell from 3.8% to 2.81%. Unicaja improved from 2.9% to 2.2% over the year, a level similar to Bankinter’s 2.14%. BBVA lags behind, with a 2.9% ratio compared to 3% in December.

The rate at which new non-performing loans are appearing is slower than in the past, allowing banks to focus on removing existing doubtful loans from their balance sheets. Moreover, they are increasingly selling newer loans, gradually phasing out older ones—thereby reducing the discounts at which portfolios are sold. Additionally, more portfolios are being sold that contain loans not in default but that have experienced some payment issues (so-called reperforming loans, or RPLs). In the coming months, banks expect to continue this portfolio-selling strategy. In fact, several specialist advisors believe the trend will accelerate.

José Antonio Olavarrieta, partner at Deloitte, notes there is increasing activity with more transactions: “We expect a certain continuity in the types of portfolios being sold compared to the first half of the year, though with a higher number of deals, especially in the RPL and NPL segments (mainly unsecured and mortgage-backed),” he adds.

Greater Transparency

Ángel Pérez López, partner at Uría, highlights that Spain is still pending approval of the Draft Law on Credit Purchasers and Servicers. The country is delayed in transposing a European directive aimed at facilitating NPL sales and increasing transparency in the process. Brussels has already threatened to impose a fine.

“The regulation will be very important for the sale and management of NPLs. Once approved, this law—based on a directive from December 2021 and introduced in Spain with a draft bill in May 2024—will bring much greater certainty to the Spanish NPL market,” says Pérez López, who also notes more activity in RPLs than in NPLs. “Despite the decline in bank NPL ratios, Spain remains a relevant market, which has led to more selective strategies. Still, strong interest in high-yield assets suggests specialized investors remain active. Reperforming portfolios have shown steady momentum, with a slight uptick in interest due to their more controlled risk profile.”

The transposition of Directive 2021/2167/EU—which harmonizes the regulatory framework and strengthens protections—is expected to create a safer and more flexible market, driving increased institutional interest, summarizes Paloma Moreno de la Santa, team director at Baker McKenzie

Original story: El Confidencial | Author: Oscar Gimenez
Edition and translation: Prime Yield

Servdbet completes the sale of Solaris €1.3 bn NPL portfolio

15 September, 2025

Servedbet has successfuly completed the disposal of the Project Solaris NPL portfolio, with a total gross book value of approximately €1.3 billion. Alantra has advised the seller throughout the process.

Project Solaris is a secondary portfolio comprising nine granular secured and unsecured non-performing loan (NPL) portfolios, with a total gross book value of approximately €1.3 billion. The lion’s share of the assets, about €870 million, are portfolios in the Portuguese market, while the other €480 million correspond to portfolios in Spain.

According to Alantra, the transaction closed in 2025, with the winner bidder acquiring a majority stake through a tailored securitization structure. The buyer’s name wasn’t disclosed.

‘The deal was executed via a Portuguese STC securitization vehicle, under which the investor subscribed 80% of the notes backed by the portfolios, while Servdebt retained 20%. All proceeds were paid unfront to the seller. The structure was design to maximize flexibility and ensure alignment of interests, with Servdebt continuind as a servicer to drive future recoveries.’

Original Story: Alantra
Edition: Prime Yield

Image by Credit Commerce from Pixabay

NPLs at ECFs have fallen to their lowest level since May 2008.

10 September, 2025

The volume of doubtful loans at Spain’s financial credit institutions (ECFs) dropped to €2.404 billion in June, reaching its lowest level since May 2008, according to the latest data released by the Bank of Spain.

These institutions specialize in specific credit areas such as consumer loans, mortgages, credit cards, guarantees, leasing, and factoring, but unlike traditional banks, they are not permitted to accept deposits.

Most Spanish banks operate their own financial arms to support consumer credit, while other companies—including major supermarket chains and vehicle manufacturers—also run financing entities to offer credit to customers purchasing their products or services.

In June, the stock of doubtful loans held by these financial institutions decreased by €166 million compared to May, and by nearly €2.9 billion year-on-year. This brought their non-performing loan (NPL) ratio down to 5.42%, the lowest since December 2019, before the COVID-19 pandemic, down from 6.03% the previous month and 6.43% a year earlier.

This improvement was supported by an increase of €1.73 billion in new loans granted, pushing the total loan portfolio to €44.3 billion in June, although still €527 million lower than in June 2024.

While ECFs typically have higher delinquency rates than deposit-taking banks, their overall credit volume remains significantly smaller. For comparison, traditional deposit banks reported an NPL ratio of 2.89%, with a loan portfolio totalling €1.13 trillion.

Original Story: Europa Press
Edition and translation: Prime Yield

NPL Sector Reinvents Itself Amid Market Slowdown

9 September, 2025

Hipoges is preparing to enter the real estate development financing market, aiming to fill the gap left by traditional banks, which are increasingly constrained by European Central Bank policies. “Diversification has become a natural and strategic step,” says co-CEO Hugo Velez to ECO. Operating in four countries and managing over €50 billion in assets, the company is also eyeing expansion into France and a potential return to Brazil.

LX Partners, based in Luxembourg, is shifting focus toward sectors like self-storage — via its operator Perfect Space — and SME financing. Its newly launched fund, Five Credit, holds €300 million to support around 5,000 Portuguese SMEs, particularly in their green transition, offering faster and more flexible funding options than traditional banks.

The sector is far from the “golden era” of the last decade, when major banks offloaded billions in toxic assets. With NPL levels at record lows (below 5%) and a modestly growing economy, no strong market rebound is expected. Some players, such as Italy’s DoValue, have exited the Portuguese market. Others, like Hipoges and LX Partners, are adapting — and positioning themselves for long-term growth.

Original Story: ECO | Author: Alberto Teixeira
Edição e tradução: Prime Yield

Corporate lending drives bank loan growth in first half of the year

8 September, 2025

Greece’s four largest banks (Alpha, Eurobank, National and Piraeus), registered a net credit expansion of €4.7 billion in the first half of 2025 compared to the same period in 2024.

If one includes all group activities abroad, credit expansion reached €5.5 billion.

The expansion is due to the financing of projects partly funded by the European Union’s Recovery and Resilience Fund; also, banks emphasized credit to small and medium-sized enterprises rather than households.

The trend is expected to continue in the second half of the year.

The four banks’ total performing loan portfolio at the end of June was €132 billion from €127.3 billion at the end of 2024, despite a hit in the valuation of credit to shipping companies, as it is done in dollars and the dollar has lost ground compared to the euro.

At group level, Eurobank owns the largest performing credit portfolio (€48 billion, up from €46.3 billion at the end of 2029), of which €30.3 billion is in loans to Greek corporations and individuals; Piraeus Bank’s portfolio (€35.9 billion) focuses on domestic firms. So does Alpha’s, where loans in Greece accounted for €32.6 billion of the €34.4 billion in its overall portfolio.

Original Story: Ekathimerini | Author: Newsroom
Edition: Prime Yield

Bank NPLs fall below 3% in June for the first time since 2008

2 September, 2025

The non-performing loan (NPL) ratio of Spanish banks fell below 3% in June for the first time since October 2008, according to historical data published by the Bank of Spain.

Furthermore, the NPL rate in June decreased compared to 3.11% in May and 3.43% in the same month of 2024.

In terms of loan volume, the stock of doubtful loans amounted to €36.291 billion, representing a reduction of €955 million compared to May and €4.599 billion compared to June 2024. This also marked the lowest amount of non-performing loans since June 2008.

The decline in the NPL ratio is also explained by an increase in the total volume of credit granted, which reached €1.220 trillion in June. This implies a rise of €23.113 billion compared to May and €27.848 billion compared to June 2024.

On the other hand, data broken down by type of institution show that the doubtful loan ratio for all deposit-taking institutions (banks, savings banks, and cooperatives) ended June at 2.89%, two basis points lower than in the previous month and 43 basis points lower than in the same period of 2024.

In absolute terms, these institutions recorded a decrease of €788 million in their doubtful loan portfolio, down to €33.703 billion. Compared to June 2024, this figure is about €4.129 billion lower.

Meanwhile, credit financial institutions saw their delinquency rate fall to 5.42%, 61 basis points lower than in May, although the year-on-year reduction is one percentage point.

Additionally, the volume of doubtful loans for these institutions stood at €2.404 billion at the end of June, €166 million less on a monthly basis. Compared to the same month last year, the doubtful balance decreased by about €479 million.

Finally, according to the Bank of Spain, total credit institutions’ provisions stood at €27.654 billion, a reduction of €330 million compared to May, while the year-on-year change showed a decrease of €1.598 billion.

Original Story: Europa Press
Edition and translation: Prime Yield

Moody’s: Big Greek banks’ profits solid, bad loans down

1 September, 2025

Credit ratings agency Moody’s said, on August 13th, that half-year profits announced by Alpha, National, Piraeus Bank and Eurobank are on solid ground, based on credit expansion and nonperforming loans (2.9% in June) inching closer to the European average (2.2%).

Original Story: Ekathimerini | Author: Newsroom
Edition: Prime Yield

President signs new law on NPL management

1 September, 2025

On August 13, the President of Portugal signed into law a new decree transposing EU Directive 2021/2167 into national legislation. The directive standardizes the rules for managing non-performing bank loans and sets requirements for credit purchasers.

Portugal missed the EU’s deadline for implementation — December 30, 2023 — prompting the European Commission to launch an infringement procedure. The case was referred to the European Court of Justice (ECJ) on February 12, 2024. Just a week later, the Portuguese government approved the long-delayed legislation in a Council of Ministers meeting.

The law aims to boost the secondary market for non-performing loans (NPLs) while ensuring that credit sales do not infringe on borrowers’ rights. It also enables credit servicers to market NPLs in other jurisdictions.

Portugal is not alone in the delay: six other EU countries — Bulgaria, Spain, Hungary, the Netherlands, Austria, and Finland — are also facing legal action for failing to implement the directive on time.

Original Story: Observador | Author: Lusa
Edition and translation: Prime Yield

KKR negotiates sale of Hipoges to Pollen Street

31 July, 2025

The deal, which could be closed for between 100 and 150 million, would be a cut compared to the 200 million asked for two years ago.

KKR is moving forward in the process of divesting Hipoges, its subsidiary specialising in the management of real estate assets in Spain. As reported by Bloomberg, the US fund is in exclusive negotiations with Pollen Street Capital, a British investment firm that also controls the servicer Finsolutia.

The sale process, which was reactivated at the end of 2023 with the mandate granted to Alantra, has entered its final phase. Although KKR’s initial objective was to reach a valuation of around 150 million euros, sources quoted by ElConfidencial suggest that the deal could finally close at around 100 million. In any case, both figures would represent a downward adjustment compared to the 200 million requested in a previous sale attempt that did not materialise.

After that failed attempt, Hipoges explored the possibility of acquiring Servihabitat – Lone Star’s real estate subsidiary -, an operation which also failed to come to fruition.

Hipoges’ situation has been conditioned by the recent transfer of assets from Sareb to Entidad Estatal de Suelo (Sepes), with the aim of allocating them to affordable rentals. This government decision directly affects the servicer, which in 2021 was awarded the management of a portfolio valued at €25 billion from the so-called ‘bad bank’.

In addition to Pollen Street, other firms such as doValue (owner of Altamira), J.C. Flowers (through Pepper Advantage) and Arrow Global Group (through Amitra Capital) have also shown interest in the transaction.

With a portfolio of more than €50 billion under management, Hipoges remains one of the leading real estate and financial asset servicing platforms in Spain.

Original Story: Iberian Property | Author: Alexandre
Edition: Prime Yield

Banks offer houses with loan

22 July, 2025

Banks will now offer a house complete with a mortgage for it, as they proceed with the utilization of the real estate assets in their possession, thereby turning into digital estate agents of sorts.

Through the online platforms major lenders have developed, they will not only offer candidate buyers houses to buy but also a funding option for it.

Banks are also aiming at faster and simpler procedures, from applications to the disbursement of mortgages, through the online platforms developed and the cooperation with the servicers as well as specialized enterprises that undertake the processing of housing loans.

Up first in promoting realty and support was National Bank, through its Uniko online platform, in cooperation with Qquant of the Qualco group and its own platform realestateonline.gr for the assets it controls. Piraeus promotes its assets via piraeusrealty.gr along with alternative platforms such as realestate.intrum.gr and ReInvest.gr, with cooperation with Qualco on a new platform for mortgage promotion.

Eurobank’s realty platform Prosperty is cooperating with FinTHESIS for the agreement and approval of mortgages, and Alpha offers properties for sale with financing via its propertynow.gr platform.

Original Story: Ekathimnerini | Author: Evgenia Tzortzi
Edition: Prime Yield

Bank of Spain warns of increased risk of default in the real estate sector

21 July, 2025

The Bank of Spain has warned investors in the real estate market that the risk of default in the sector has increased.

This Monday, the Bank of Spain issued a statement warning of an increase in the risk of loan default by non-financial companies, largely driven by the construction and real estate sectors, as well as other services.

‘There has been a slight increase in the probability of loan defaults in recent quarters,’ the bank said in its biannual report on the financial situation of households and businesses. The report states that the probability of defaulting on bank debt has risen by 39 basis points since the third quarter of 2023, increasing from 2.14% to 2.5%. However, this figure remains 25 basis points below the 2022 average.

Of these 39 basis points, 31 rose in the fourth quarter of last year, while the remaining eight points rose in the first half of 2025. This trend was observed across companies of all sizes.

Nevertheless, the deterioration in credit quality was somewhat more pronounced among large companies, with a 51-basis-point increase in the probability of default from the third quarter of 2024 to reach 2.03%. This figure is approximately 50 basis points below the average for non-financial companies overall, according to Europa Press.

What has happened?

The recent increase in the probability of corporate default has mainly been driven by growth in the construction and real estate sectors, as well as other services. In fact, the average risk of default in these sectors has increased by 44 and 96 basis points respectively since the third quarter of 2024.

Conversely, credit risk has risen slightly in the trade and hospitality sectors, reaching nine and twelve basis points above the third-quarter 2024 probability of default in the first quarter of 2025.

Nevertheless, the Bank of Spain has warned that the data ‘do not indicate a significant increase in tail risk, as the proportion of credit classified in the highest risk category has remained at levels similar to those in 2022’.

Regarding the increase in risk in the construction and real estate sectors, the agency explained that the deterioration is due to ‘an increase in the risk associated with the credit balance, assuming a constant debt structure and borrower composition’.

Original Story: El Economista
Edition and transalation: Prime Yield

Photo: Jorge Fernández Salas at Unsplash

Bank NPL ratio continues to fall, reaching its lowest level since October 2008.

14 July, 2025

The volume of non-performing loans (NPL) fell to 37.926 billion, which is 10% less than a year earlier.

According to provisional data published by the Bank of Spain, the Spanish banking sector’s NPL ratio continued to fall in the fourth month of the year, reaching 3.18% — its lowest level since October 2008, when it stood at 2.92%.

This was also a decrease compared to March, when the default rate was 3.21%, and April 2024, when NPL accounted for 3.60% of the credit stock.

The volume of doubtful loans fell to €37.926 billion in April, which is €354 million less than in March and €4.22 billion less than in April 2024.

This decline in NPL is accompanied by an increase in the total amount of loans granted in Spain. During April, the total stock of loans granted was €1.193 trillion, representing an increase of around €2 billion compared to March, and around €22 billion compared to April 2024.

Breaking the data down by type of institution, the NPL ratio for all deposit institutions (banks, savings banks, and cooperatives) was 3.08% in April, which is three basis points lower than the previous month and almost 40 basis points lower than in the same period in 2024.

In absolute terms, this type of institution recorded a €351 million decrease in its NPL portfolio, bringing it to €35.201 billion. Compared to April 2024, this is about €3.702 billion lower.

Meanwhile, credit institutions saw their NPL ratio rise to 5.99%, an increase of 20 basis points compared to March, though the year-on-year reduction remains at over one percentage point.

The volume of NPL for this type of institution was €2.538 billion at the end of April, which is €15 million less than the previous month. Compared to the same month last year, the non-performing balance fell by around €527 million.

Finally, according to data from the Bank of Spain, provisions for all credit institutions totalled €28.548 billion in March, which was a decrease of €37 million compared to the previous month. The year-on-year variation showed a reduction of €1.49 billion.

Original Story: Diário Publico | Author: Europa Press
Edition and translation: Prime Yield

NPL: Government approves bill more than a year late

14 July, 2025

European directive should have been transposed into national law by the end of 2023. Political turmoil explains delay.

The government has once again approved a bill transposing the European directive on bad debt into national law, which also harmonises the rules for managers and buyers of this type of non-performing debt. However, this transposition is already a year and a half behind schedule due to political instability.

On 3 July, the Council of Ministers met and “approved a draft law to transpose the European Directive, which harmonises the rules applicable to credit managers and credit purchasers. The law also supports the development of secondary markets for non-performing loans (NPLs) in the EU, while ensuring that the disposal of such loans does not prejudice the rights of customers (debtors),” as stated in a press release published on the Government’s official website.

This is the second time that the AD Executive has given the green light to the bill transposing the European directive on bad debt. The first was in February this year, but the legislative process was interrupted by the fall of the Government in early March. Now, this bill is expected to go to Parliament.

The truth is that the political instability felt in Portugal in recent years has delayed – and greatly – the transposition of European rules on non-performing loans into national legislation. Specifically, Directive 2021/2167 was approved by the European authorities in November 2021, with the transposition deadline ending at the end of 2023. In other words, Portugal is more than a year and a half behind in this area. That is why the European Commission decided to take Portugal to the Court of Justice of the European Union in February.

Directive 2021/2167 aims to foster the development of a well-functioning secondary market for non-performing loans by establishing rules for the authorisation and supervision of credit purchasers and managers.

Original Story: Idealista | Author: Vanessa Sousa
Edition and translation: Prime Yield

← Older Posts