NPL&REO News

Bank shakes up NPL market with €1.3 billion deals

29 November, 2024

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

Despite ECB rate cuts, Spanish bank NPLs stagnate

26 November, 2024

The rate of non-performing loans (NPL) fell slightly in September from 3.44% to 3.43% in the midst of a slowdown in financing costs and brings the balance of NPL to over 40.4 billion.

One of the main achievements of Spanish banks after the rise in interest rates has been to keep the NPL ratio at historically low levels. The favourable evolution of the economy and the resilience of the labour market have contributed to this downward trend, pushing the NPL ratio down to its lowest levels ever. According to the latest data published by the Bank of Spain (BdE), the default rate closed September at 3.43%, slightly lower than the 3.44% recorded the previous month.

It is again close to the 3.42% it reached in June, coinciding with the first cut in the price of money implemented by the European Central Bank (ECB). In year-on-year comparison, the rate contracted by a little more than one tenth of a percentage point from 3.56%, which translates into 1,627 million less doubtful loans, down to 40,454 million. The slowdown in the Euribor has contributed to this trend and gives mortgage holders some respite. It should be recalled that the benchmark index of the mortgage market in Spain closed the ninth month of the year below 3%, something that had not happened since the end of 2022.

The organisation differentiates between the aggregate delinquency of banks, savings banks and cooperatives and that of consumer finance companies. In this regard, the former ended September at 3.32% and fell in the same proportion as the overall figure, although the amount rose slightly by 19 million to 37,420 million. Compared to a year ago, it fell by one tenth of a point. At the same time, in the case of consumer loans, the rate fell by more than two tenths of a point to 2.48%, although the amount of defaults only fell by two million per month.

The vertical rise in the cost of financing more than two years ago alerted the banking sector to a possible upturn in NPL, which in the end has not occurred. The measures promoted by the government to help mortgagors in difficulty have also helped to contain this rate, which peaked last February at 3.62%. This behaviour is recorded in the midst of an upturn in the granting of loans, which has been rising in double digits throughout the year.

In fact, the demand for mortgage loans has just experienced its best September since 2009 with the granting of 4,885 million in financing for housing. In the same month fifteen years ago, loans of this type were granted for a value of 5,235 million. The difference with that time is that the bursting of the housing bubble had already begun to hit the economy and the cost of financing hovered around the barrier of 1%, while at the end of the third quarter it stood at 3.5%, 0.25% higher than it oscillates at the present time.

Looking ahead to the final stretch of the year, the sector expects to remain at these levels in a context marked by the activation of the countercyclical buffer of 0.5% in a scenario of ‘moderate risks’, which will apply from October 2025. Subsequently, and depending on systemic risks remaining at standard levels, the percentage may be increased by another half a percentage point at the end of next year to be applicable twelve months later.

Original Story: La Información Económica | Author: Carmen Muñoz
Edition and translation: Prime Yield

Greek banks report €3.5 billion profit, plan capital improvements

26 November, 2024

Greece’s systemic banks—Alpha Bank, Eurobank, National Bank of Greece, and Piraeus Bank—plan to expedite the repayment of deferred tax credits (DTC) starting in 2025, a move that credit rating agency Morningstar DBRS has praised as credit positive.

DTCs, a legacy of the debt crisis, constitute a substantial portion of the banks’ capital but are considered a weaker form of capital.

According to Morningstar DBRS, accelerating the repayment of DTCs will improve capital quality and provide banks with greater strategic flexibility in capital utilisation.

The agency also said that the banks should be able to absorb the impact of this acceleration, provided profitability and organic capital generation remain robust.

It should be noted that in the first nine months of 2024, Greek banks reported a combined net profit of €3.5 billion, with a return on equity reaching 14 per cent.

The revised timeline aims to complete the reduction of DTCs by 2034, seven years ahead of the original 2041 target.

This accelerated schedule is expected to strengthen the banking sector’s flexibility and resilience in the years to come.

In August of this year, the agency reported that the capital reserves of Greek banks have been further strengthened, though the quality of these funds remains weak.

What is more, the agency also pointed out that cost control measures helped offset inflationary pressures and increased expenses related to digitalisation.

“The sector’s liquidity continues to be supported by large, growing, and stable deposits,” said the agency.

It also made note of increasing activity related to capital issuances, despite ongoing repayments of central bank funding.

Additionally, DBRS observed that the cost of risk decreased in the first half of 2024 compared to previous years, although it remains above the European average.

“Higher core revenues, cost discipline, and lower provisions for bad debts led to higher profits in the first half of 2024,” said Andrea Costanzo, Vice President of European Financial Institution Ratings at Morningstar DBRS.

Original Story: Cyprus Mail | Author: Kyriacos Nicolaou
Edition: Prime Yield

Axactor sells NPL portfolios in Spain for €83 million

20 November, 2024

Axactor ASA (Axactor) entered into an accretive €83 million sale of NPL portfolios in Spain. In parallel, the company announces an anticipated negative revaluation of the remaining portfolios for the fourth quarter 2024.

Axactor has entered into a binding agreement to sell NPL portfolios for a total of €83 million, representing a 2% premium over book value. The transaction represents approximately 6% of Axactor’s total NPL portfolio and the proceeds from the transaction will be used to reduce debt. The positive impact on cash metrics, such as cash EBITDA, is significant, supporting covenant compliance for at least the next four quarters.

“We believe this transaction demonstrates Axactor’s commitment to enhancing financial stability while navigating challenging market conditions. This strategic sale not only supports covenant compliance but also provides flexibility to manage our portfolios proactively,” says CEO Johnny Tsolis.

Additionally, as part of the routine quarterly NPL revaluation process, Axactor has booked a net negative NPV of changes in collection forecasts of €12 million so far in the fourth quarter, and October collections ended €3 million below forecasts (corresponding to a collection performance of 90%). Further meaningful negative revaluations are anticipated before quarter-end, and will be published as part of the fourth quarter 2024 report. The revaluations do not have any cash impact, and as such do not impact neither the interest coverage nor the leverage ratio covenants. There is sufficient headroom under the loan-to-value covenants to remain compliant also after the anticipated revaluations.

Together, these actions provide the company with a strengthened covenant position, further reinforcing the balance sheet.

Original Story: Axactor ASA
Edition: Prime Yield

Attica Bank enters into agreement with Davidson Kempner to sell €3.7 bn NPL portfolio

14 November, 2024

Attica Bank has entered into an agreement with Davidson Kempner Capital Management to dispose of two significant non-performing loan (NPL) portfolios, named “Domus” and “Rhodium”.

The deal involves the sale of 95% of the mezzanine and junior tranches of the notes from these securitisations, representing a gross book value of approximately € 3.7 billion.

Under the terms of the agreement, Attica Bank will retain full ownership of the senior tranches, which benefit from the “Hercules” asset protection scheme, and a 5% interest in the mezzanine and junior tranches. This strategic move is aimed at significantly reducing the bank’s NPL ratio, which is expected to fall below 3% on completion of the transaction.

The sale proceeds reflect the value of the senior tranches combined with the purchase price for the subordinated notes.

This represents approximately 35% of the gross book value of the Domus and Rhodium portfolios. The transaction is expected to close in the fourth quarter of 2024, subject to regulatory approvals.

Attica Bank was advised financially by UBS Europe SE and legally by Milbank LLP and Hogan Lovells LLP internationally and Potamitis-Vekris locally.

Original Story: Iefimeridia | Author: Anthee Carassava
Edition: Prime Yield

Santander sells €90 million of unsecured RPE to Balbec

13 November, 2024

Banco Santander is releasing more unproductive assets from an old acquaintance. The bank has sold unsecured re-performing loans (RPL) to individuals and SMEs to US fund Balbec Capital for a total of around 90 million euros, market sources told elEconomista.es.

The structure of the sale is unique, as the company will continue to service the current loans, along with other mechanisms to avoid any reputational risk with clients and is linked to an agreement that guarantees the fund the future purchase of the loans that may go unpaid.

“Re-performing debt consists of healthy financings that have been restructured or defaulted in the last year and has become an asset that is increasingly important in the portfolio sales market.

Despite the fact that they are current, the fact that they have suffered payment incidents or have been restructured implies a consumption of provisions for the banks, which see an incentive to transfer the risk in the possibility of reducing this burden, although they usually retain their management due to the link with the client. In fact, many transactions are carried out through securitisation, which allows the risk to be deconsolidated while maintaining this link.

Santander relied on Alantra for the operation now being completed, a consultant it has also used this year to carry out the Turf and Frankel projects, and in previous years for the sale of the Model and Titan projects, among others.

Original Story: El Economista | Author: Eva Contreras
Edition and translation: Prime Yield

CGD puts ‘Moon’ portfolio on the market

12 November, 2024

The State’s bank CEO, Paulo Macedo, has revealed that Caixa Geral de Depósitos (CGD) is going to put a new portfolio of unsecured non-performing loans (NPL), totalling a nominal value of 440 million euros, up for sale.

Despite its low NPL ratios, Caixa Geral de Depósitos is still going to clean up its balance sheet. The bank will put a portfolio of Non-Performing Loans (NPL) worth 440 million euros on the market this quarter, revealed Paulo Macedo, at the presentation of the quarterly results.

It already has a name. It’s the ‘Moon portfolio’, and it’s made up of old loans, known as granular, without guarantees (unsecured).

At the end of September, the consolidated NPL ratio was 1.59%, down from 1.65% in December

Original Story: Jornal Económico | Author: Maria Teixeira Alves
Edition and translation: Prime Yield

Novobanco tries to “clean up” another 300 million in bad debts before the sale

6 November, 2024

The bank led by Mark Bourke continues to sweep the corners of the balance sheet before going ahead with the sale. It has placed on the market a portfolio of unsecured loans worth 300 million euros.

With strides towards sale, Novobanco continues its efforts to clean up its balance sheet. In the last few weeks it has put up for sale a portfolio of bad debts with a book value of 300 million euros, according to information gathered by ECO. Other banks such as Santander, BCP and Crédit Agricole are also on the market with operations totaling 400 million euros.

In the case of the bank led by Mark Bourke, the portfolio in question is made up of so-called “unsecured” loans; loan contracts without associated guarantees, which should remove some investor appetite for this so-called “Pegasus” portfolio. Interested parties had to express their interest by the beginning of this month. The process is continuing and the bank expects completion by the end of the year, according to what it announced to the market.

This effort to clean up the balance sheet is not unrelated to the plans that the bank (Lone Star, which holds 75% of the capital) has for the near future.

At the moment, Novobanco and the Resolution Fund are negotiating an early end to the contingent capital mechanism, which was created in 2017 when the bank was sold to the American fund and which will only end at the end of next year, in a move that will open the door to dividends and sales, something that is expected to happen in the first half of next year.

As ECO reported at first hand, the Ministry of Finance already has a version of the contract to put an end to the agreement, which will mean that the bank and the fund already have a basis for understanding. For Minister Joaquim Miranda Sarmento, there is even a great incentive to endorse the early termination of the mechanism:dividends of 250 million euros to the public coffers, which should result from the release of a thousand million euros of excess capital that Novobanco has accumulated over the last four years.

With the end of the dividendban, It is true that the major effort took place from the moment it was sold to Lone Star, taking advantage of the guarantee of loss coverage that the contingent capital mechanism provided between 2018 and 2021, having injected around 3.4 billion euros into the bank.Since 2016 until June, this effort has resulted in a reduction in the NPL (non-performing loans) ratio from 33.6% to 4.1%.

Even so, Novobanco still had 1 billion euros in non-performing loans on its balance sheet at the end of the first half.

A hectic end to the year in banking

The non-performing loans market is going through a hangover period after the massive sales of large portfolios (starting with Novobanco) in recent years.

But the last few months of the year brought some excitement with several banks active on the market. BCP has just sold the Spring Project, worth 265 million euros, with loans from Inapa and the promoter of the Algarve Autodrome, and has now put the Lyra Project up for sale, worth 90 million euros.

As the ECO also reported, the Crédit Agricole is also in the process of selling off a portfolio worth 93 million euros, mainly to small and medium-sized enterprises (SMEs).

Santander Totta (140 million euros), Bankinter (30 million euros) and Banco Montepio (amount not yet determined) are also in the market, according to various sources obtained by the ECO.

Original Story: ECO | Author: Alberto Teixeira
Edition and translation: Prime Yield

Sabadell claims €365 million from Cerberus in court for the sale of portfolios

6 November, 2024

Sabadell and Cerberus are in court in a dispute valued at 365 million euros.

Sabadell and Cerberus are facing each other in court with a dispute valued at €365 million . The bank claims the U.S. fund for not paying what, in its opinion, it owes for the purchase five years ago of three portfolios of real estate assets residing in Spain, according to the Financial Times.

The origin of the conflict goes back to the process carried out by Sabadell to “clean up” the toxic assets that accumulated on the balance sheet after the financial crisis. Like the rest of the banks, the entity packaged the damaged exposure and sought to deconsolidate it by selling it to a third party.

The entity thus agreed in 2018 and, after a competitive process,to sell to Cerberus theportfolios ‘Challenger’, ‘Coliseum’ and ‘Rex’, which had properties of all types for a total gross value close to €6,414 million.

The transaction consideration set at around 3,500 million euros and, as usual in these operations, both partners agreed to defer in time up to 21% of the total amount -some 600 million-, according to sources close to the judicial process.

Some of the properties in the portfolio lacked the relevant registration in the Spanish property registry due to issues such as being in the process of repossession or auction under development. And under the agreement, Sabadell must resolve these registrations to regularize the situation of the properties, with a three-year period until the end of the 2022 financial year.

The bank anticipated the works on the properties in the portfolio ‘Coliseum’and Cerberus paid the deferred payment associated with it – about 170-180 million-. The amount outstanding was thus reduced from around €600 million to around €400 million.

The conflict came with the ‘Challenger’ and ‘Rex’ portfolios. Sabadell complied with the records in a package of real estate valued at €365 million that now demands in court, but the American fund refused to support the payment alleging that it had not been satisfiedon the totality of the assets.

Following Cerberus’ refusal, Sabadell sued the fund in January 2023 in the High Court of Justice in England because the fund’s company guarantor of the agreement formalized in Spain is subject to British law.

The trial was held last week and the magistrate in charge of the case advanced his intention to issue a ruling before Christmas, in the second week of December. The ruling could be final because it is very unusual to file appeals in the United Kingdom and is reserved for very narrow issues.

Original Story: El Economista
Edition and translation: Prime Yield

JP Morgan Remains ‘Bullish’ on Greek Banks

4 November, 2024

JP Morgan reiterated its analysis of DTCs, prompted by Piraeus Bank’s plan to accelerate their amortization.

P Morgan remains “bullish” on Greek banks, stressing stock buybacks and accelerated amortization of Deferred Tax Credits (DTC) will act as catalysts.

Citing solid third-quarter earnings and announcements from Piraeus Bank, the American multinational financial services firm estimates that the Greek banking sector’s overall yields could exceed 10% by 2025.

Piraeus Bank recently announced an increase in the distribution of net profits, aiming for 35% in 2024 and 50% in 2025. Share buybacks will be the primary capital distribution method next year, which JP Morgan believes will boost returns for the sector. It anticipates that every 10% distribution in the form of share buybacks could add an average of 2.1% to earnings per share, with similar plans expected from other Greek banks.

Two other Greek banks, Eurobank and Alpha Bank have both followed this strategy in the recent past, and the National Bank of Greece has announced plans to repurchase part of the Financial Stability Fund’s holdings. Piraeus Bank also confirmed that a buyback plan is in place as part of its 2024 distribution strategy.

JP Morgan reiterated its analysis of DTCs, prompted by Piraeus Bank’s plan to accelerate their amortization. Greek banks face annual limits on the DTCs they can use to offset tax payments, with the existing schedule extending to 2041.

In addition, bank managements plan to voluntarily deduct additional DTC amounts from their supervisory capital, aiming for complete amortization from Common Equity Tier 1 (CET1) by 2034—well ahead of the 2041 deadline.

In the short term, this strategy won’t alter balance sheet trajectories but signals capital quality confidence, according to JP Morgan, which continues to view the market as overly conservative in perceiving DTCs as an obstacle to higher capital distribution.

Original Story: TOVIMA
Edition: Prime Yield

Bank of Greece reports €19 bln deposit influx since 2021

22 October, 2024

Deposits of approximately 19 billion euros have returned to banks from households and businesses since 2021, reflecting a 16% increase, according to a note on the Greek economy from the Bank of Greece.

The BoG’s economic bulletin highlights significant inflows of deposits from households primarily during the 2021-2023 period, while the fatigue observed in the first quarter of 2024 is attributed mainly to a shift toward alternative savings options offering higher returns than traditional deposits.

Original Story: Ekathimerini
Edition: Prime Yield

Too many ‘zombie’ firms in 2021 weighed on NPLs

16 October, 2024

Nearly one in 10 firms in Greece in 2021 were “zombie” companies, according to a recent report by the Foundation for Economic and Industrial Research (IOBE), which revealed that 4,500 of 51,000 firms surveyed were at least 10 years old and had an interest coverage ratio of less than one percentage point for three consecutive years.

Stressing that such a large number of underperforming firms harmed healthy competition in the product and service markets, IOBE found that the ratio of “zombies” rose between 2004 and 2013, from 10% or 3,400, to 18.6%, or 7,200 companies. However, their number started to decline in 2014, dropping from 16.5% or 6,900 to 8.9% and 4,500 companies in 2021.

The study links the increase in the number of companies that struggle to repay the interest on their loan obligations over the course of several years to the non-performing loans (NPL) crisis, going on to highlight the need for measures to prevent a repetition of the phenomenon.

IOBE notes that a high NPL burden negatively affects credit expansion rates, while the reduction of NPLs frees up resources that stimulate credit expansion. Based on estimates with an average value of business loan stock close to 85 billion euros for the period 2010-2023, every reduction in non-performing business loans by 1 or 5 percentage points leads to new annual net flows of business loans of €200 million or €1 billion, respectively.

As a result, IOBE concludes that the cumulative reduction of non-performing loans on bank books by more than 40 percentage points in 2016-2023 resulted in an increase in net business loan flows by approximately €8 billion out of the €22.5 billion (36% of credit expansion) recorded during the same period.

IOBE notes that despite showing a marked improvement, the reduction of non-performing loans (NPLs) by banks is largely due to write-offs, sales and securitizations during the 2016-2022 period and less so to a conventional improvement.

As a result, most of the NPL stock moved off bank balance sheets came under the management of servicers. Consequently, business non-performing loans in the overall economy decreased by only 28% during the 2016-2022 period, reaching approximately €42 billion in 2022.

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

Goldman targets Spanish debt portfolios again: finalises purchase of €450m from Bankinter

15 October, 2024

The US bank has set its sights on the credit cards of Bankinter, which has put a portfolio of loans worth €450 million up for sale.

Goldman Sachs has renewed its appetite for Spanish debt portfolios. A year after it completed the sale of all its real estate portfolios in our country, portfolios acquired during the great financial crisis, it has decided to make another move in Spain.

This time it is focusing on Bankinter’s credit cards, a company that has put up for sale a portfolio of loans worth €450 million.

According to Bloomberg, the US company is the favourite to acquire this portfolio, which consists of loans to 50,000 former credit card holders.

The decision by the bank, chaired by María Dolores Dancausa, to sell this portfolio is part of a general move by the sector to control the default rate, which has been a concern following the rise in interest rates.

Bankinter’s NPL ratio stood at 2.2% in the second quarter of this year, slightly above 2.1% in 2023, a ratio that will reach 2.5% for its Spanish business, below the 3.4% estimated by the Bank of Spain for the entire system in our country.

The process initiated by Bankinter is no exception, and several Spanish banks are already trying to get rid of billions of euros in view of the new interest rate scenario.

Original Story: El Confidencial | Author: Cotizalia
Edition and translation: Prime Yield

Greek mortgage market grinds to a halt

9 October, 2024

Greece’s mortgage market has registered consecutive negative records, with Greece being the only country in the European Union to be in negative territory for housing loans over the last three years.

With the decline in mortgage lending extending beyond the last three years due to the previous financial crisis, it is clear that mortgages are the main problem in the banking system, despite the fact that funding costs and interest rates for the housing market have fallen to average European levels.

The average interest rate in the country is 4%, down from a year ago and in line with the European average, but the annual financing rate was -2% at the end of July, compared with -3% a year ago and -2% over the last three years.

This is according to the report published by the European Systemic Risk Board (ESRB), which warns of financial stability in the euro area following the intensity of recent geopolitical developments, which, as has been pointed out, could disrupt global trade and prices.

Corporate lending is bucking the downward trend in household borrowing, with Greece ranking second among EU countries – after Lithuania – with the highest annual growth rate in corporate financing, according to ESRB data.

Based on July data, the rate of credit expansion stood at 10% at the end of July, compared with 3% a year ago and 8% cumulatively over the past three years. Two-thirds of the portfolio of Greek banks – 77.7 billion euros out of a total of 118.6 billion euros – now consists of loans to enterprises, and the average cost of financing is the average of the euro area countries, namely 5.8%, with a downward trend compared to a year ago.

The decline in housing loans comes despite a narrowing of bank spreads on housing loans to close to 1.5% at the end of July, down from more than 2% a year ago, and is related to high house prices, according to the ESRB data, with Greece among the countries with the highest increase in house prices. The increase in house prices over the last year is more than 10%, while over a three-year period it is more than 40%, making Greece one of the countries with the highest increase after Poland and Bulgaria.

Fonte: Ekathimerini | Author: Evgenia Tzortzi
Edition: Prime Yield

Santander to sell 160 million bad loans

7 October, 2024

The market for the sale of non-performing loans by banks is accelerating. Santander has just put up for sale an NPL portfolio worth 160 million euros, made up of loans to large debtors.

Banco Santander Portugal has just put up for sale a portfolio of non-performing loans (NPLs) worth 160 million euros, the majority of which is made up of loans to large debtors (single names).

This NPL portfolio is mixed, between secured and unsecured, but the largest positions are loans with guarantees, Económico understands.

The bank declined to comment.

The market for banks to sell non-performing loans is accelerating at a time when the government says it has a legislative proposal to transpose the directive on credit managers and purchasers, with the aim of ensuring consumer protection. This is a European requirement.

Original Story: Jornal Económico | Author: Maria Teixeira Alves
Edition and translation: Prime Yield

Crédito Agrícola sells €93 million in NPL

30 September, 2024

Crédito Agrícola has just put up for sale a portfolio of non-performing loans (NPL) worth €93 million, the majority of which belong to small and medium-sized enterprises (SMEs), according to information gathered by ECO from market sources.

The sale includes a stake of secured operations, i.e. contracts with guarantees, 65 per cent of which correspond to NPL for SMEs, according to the same sources.

An official bank source confirmed that the ongoing market consultation process, which is expected to be completed in 2024, is part of the planned implementation of the strategy to reduce exposure to NPLs.

The group led by Licínio Pina has seen its assets decline recently due to high interest rates. In June, the NPL ratio reached 6.5%, up 0.3% from last year. This is more than double the national average of below 3%.

This was an increase of €36.4 million to 765.3 million, with over half (410.5 million) corresponding to SME NPLs. The portfolio on the market represents approximately 12 per cent of the NPL stock. By the end of June, the total amount of money set aside to cover NPLs was 293.3 million. This meant that 38.3% of NPLs were covered.

Original Story: ECO | Author: Alberto Teixeira
Edition and translation: Prime Yield

BBVA continues to shed weight and prepares to sell €600 million in doubtful loans

24 September, 2024

BBVA has kicked off the sale of a portfolio of 600 million euros in non-performing mortgages, a process that is part of the bank’s interest in improving its capital ratio. The entity chaired by Carlos Torres has hired Alantra to carry out an orderly process of these loans, a transaction that is expected to go to market in the coming days, according to Bloomberg. This is one of the largest portfolios that BBVA has brought to market in recent years and, moreover, comes at a critical time for the bank, which is in the midst of a takeover bid to try to acquire rival Banco Sabadell.

The sale of portfolios of doubtful assets is one of the bank’s formulas for freeing up provisions and, with them, improving its capital ratios. A reasoning that seems to be behind both BBVA’s move and the portfolio that Sabadell has also put on the market.

The Catalan entity has put up for sale the third portfolio of doubtful loans it has launched so far this year, a portfolio comprising 380 million euros in unpaid consumer and SME loans. These are unsecured loans, which are usually sold to opportunistic funds at significant discounts. Between 2023 and 2024, BBVA has also placed three portfolios on the market with a total volume of €1,100 million.

Original Story: El Confidencial
Edition and translation: Prime Yield

Greece plans further €1bn guarantees for Hercules

18 September, 2024

Greece’s request to the EU’s Directorate General for Competition, to be submitted in early October, foresees €1 billion of new guarantees under Hercules III to help banks reduce non-performing loans (NPLs).

The extension of the programme by €1 billion brings to €3 billion the amount of guarantees that the State has provided or intends to provide under Hercules III (from the €2 billion initially approved), while the total guarantees under the three successive extensions of Hercules are estimated to be close to €23 billion.

The Ministry of Economy and Finance has already started exploratory contacts with the relevant EU Directorate for the approval of the additional amount of guarantees.

DBRS estimates the amount of guarantees repaid so far at €2.2 billion out of a total of €19.2 billion guaranteed by the state for 17 securitisation transactions totalling €42.8 billion. Based on the same analysis, the outstanding balance of guarantees was €17 billion at the end of June and, as DBRS notes, “the decrease of around €2.2 billion, or 11.5%, shows that the majority of business plans still need to be worked out.

Original story: Kahtimerini | Author: Evgenia Tzortzi
Edition: Prime Yield

Balbec/LX Partners, LCM Partners and Arrow Global in pole position to acquire BCP’s Project Spring

16 September, 2024

The Balbec – LX Partners consortium, the UK fund LCM Partners and Arrow Global are the three candidates selected by BCP to submit binding offers for the purchase of a €90 million portfolio of non-performing loans (NPL) from the bank headed by Miguel Maya.

The so-called ‘Swift project’, which consists of unsecured NPLs, will receive binding offers on 18 September, according to Jornal Económico.

Earlier this year, BCP sold a €265m portfolio of single names, or loans from major clients in default, known as the Spring project, which our sources say was bought by Arrow Global.

The Balbec – LX Partners consortium, the UK fund LCM Partners and Arrow Global, who are in pole position to buy the Swift project, are the same candidates to buy a portfolio of non-performing loans from the KKR fund, called the Nata project, which consists of the resale of a portfolio bought by Novobanco in 2018, made up of NPLs with guarantees (secured), and whose binding proposals must be submitted on 2 October.

Fonte: Jornal Económico | Author: Maria Teixeira Alves
Edition and translation: Prime Yield

Greece to Complete Bank Privatisations with October Sale of Final Stake

13 September, 2024

Greece is set to finalise its post-crisis bank privatisation efforts by early October with the sale of its remaining stake in the National Bank of Greece (NBG), sources told Reuters.

The upcoming sale will conclude a significant chapter for Greece’s banking sector, which was severely impacted during the debt crisis that nearly pushed the country out of the eurozone. This crisis led to stringent austerity measures imposed by international lenders in exchange for bailout funds.

Currently, the Hellenic Financial Stability Fund (HFSF), established in 2010 to stabilise Greece’s major banks and prevent wider financial contagion, holds an 18.4% stake in NBG. The plan is to sell between 10% and 13% of this stake, with the remainder being transferred to Greece’s sovereign wealth fund.

“The exact stake and timing for the sale will be decided next week,” one source revealed. The HFSF began reducing its holdings last year after injecting around 50 billion euros to support Greece’s top banks during the crisis.

The divestment of HFSF’s stakes in Eurobank, Alpha Bank, Piraeus Bank, and part of its NBG stake is viewed as a positive indicator of Greece’s economic recovery. However, many Greeks continue to experience the lingering effects of the crisis.

The sale of the NBG stake will be conducted through a book-building process and public offering, with JP Morgan advising on the transaction. If demand is strong, the government may opt to sell the full 13% stake.

Original Story: Greek City Times | Author: Reuters
Edition: Prime Yield

← Older Posts