NPL&REO News

Savings from companies in Portuguese banks reach a new historic high

The Bank of Portugal (BoP) announced that deposits by companies in resident banks increased 16.3% in August compared to the same month in 2020, reaching a new historic high of 58.8 billion euros.

“Concerning deposits by individuals in resident banks, which in July had reached a record €169.9 billion, grew by 7.1% in August, year-on-year, adding 169.3 billion euros (they had increased by 6.6% in the previous month).”

According to the BoP, “since March 2020, households have increased their deposits with banks”, with this growth “a trend and values close to those of the euro area”.

Regarding the total amount of loans granted to households for housing, it grew by 4% year-on-year to 95.6 billion euros, after increasing by 3.9% in the previous month.

Consumer loans grew by 1.3% year-on-year to 19 billion euros in August 2020 (they had increased by 1.6% in the previous month).

Regarding companies, the total amount of loans granted in August 2021 grew by 5.2% year-on-year to 76.2 billion euros, decelerating slightly from the 5.9% increase in the previous month.

“Contrary to the evolution seen in 2020 and early 2021, largely related to the impact of the lines of support for the economy granted in the context of the pandemic, the pace of growth in loans to companies has once again slowed for the fourth consecutive month,” says the central bank.

“Still – it adds – loans to businesses have been increasing at a faster pace than observed in the euro area.”In August, the reduction in the pace of growth of loans to businesses “was across all size classes”

Original Story: Eco  News |  Lusa
Photo: Bank of Portugal website
Edition: Prime Yield

Bank of Spain asks Banks to monitor state-backed loans

Spanish banks must carefully monitor the performance of state-backed loans granted during the COVID-19 pandemic to identify risks and any potential rise in bad debts, the central bank’s deputy governor said.

Last year, the government approved up to 100 billion euros in so-called ICO liquidity lines, where Spain guaranteed up to 80% of the loans that were channelled through banks to small and mid-sized companies and the self-employed.

“The evolution of these portfolios will have to be monitored over the coming months … because the few remaining waivers … have expired and also because of the performance of ICO-backed exposures,” Bank of Spain deputy governor Margarita Delgado told a financial event.

Delgado said assets under special surveillance, or considered subject to heightened credit risk, had increased in recent quarters but were still at a “relatively low level”, including in the hard-hit areas such as tourism.

The deputy governor urged lenders to continue strengthening their capital buffers and not ease up on provisions to cope with a potential rise in bad loans.

“There should be no rush to reverse last year’s provisions until there is full confidence that the loan portfolio is performing as expected,” she said.

So far, bad loans have not risen in Spain due to guarantees and moratoriums but could climb once those protections are withdrawn, analysts say.

In July, non-performing loans at Spanish banks stood at 4.39%, its lowest level since March 2009.

Several Spanish banks have merged to cope with the effects from ultra-low interest rates and a potential rise in bad loans.

Delgado said there appeared to be more limited scope for mergers after a wave of consolidation that has number of Spanish lenders to 10 from 55 before the financial crisis in 2008.

Original Story: Reuters | Jesús Aguado, Emma Pinedo 
Photo: Bank of Spain website
Edition
: Prime Yield

Bankers confident about the growth prospects for Greece’s economy

Greek bankers expressed their high confidence over the growth outlook of the Greek economy and the domestic banking system. Speaking during a conference organised by MasterCard on innovation, the CEOs of the four systemic banks agreed that the Greek economy’s growth rates will be high in the coming years based on recent estimates, creating increased interest for investments in the country.

The bankers emphasised the Recovery Fund and the prospects created for changing the country’s economic model through the use of these funds. They added that Greek banks have made the necessary preparation, created infrastructure and have contacted their clients to achieve the maximum exploitation of these funds.

Enterprises, particularly those that are small- and medium-sized, will become more competitive, they noted, adding that the role of banks will not be limited to offering loans but it will also focus on consultancy services.

Original Story: The National Herald | Athens News Agency 
Photo: Photo by Svilen Milev in FreeImages.com
Edition: Prime Yield

Spain’s NPL rate at its lowest in 12 years

The nonperforming loan (NPL) rate of Spanish banks stood at 4.34% in July, its lowest figure in twelve years, since March 2009.

According to the latest data from the Bank of Spain, the outstanding loan portfolio at the end of July reached 1.220 billion euros, compared with 1.232 billion euros the previous month.

The balance of NPL also fell from 54.218 to 53.644 million, which also contributed to the decline in the indicator.

Since July 2020, when it stood at 4.72%, the NPL ratio has fallen by three tenths of a percentage point.

So far this year, bank NPLs have ranged from 4.55% in February and May to a low in July.

In addition to the total data for the sector, the Bank of Spain publishes each month the aggregate default rate of banks, savings banks and cooperatives (cajas rurales), on the one hand, and, on the other, that corresponding to financial credit institutions (EFCs), which finance the purchase of large consumer goods.

The combined NPL ratio of banks, savings banks and cooperatives also reached an annual low of 4.33%, down from 4.34% in June.

The loan portfolio stood at 1.1172 billion euros, with a volume of doubtful loans of 50.793 million euros, down from 51.356 million euros in June.

In the case of financial credit institutions (FCIs), which specialise in financing large consumer goods, the NPL ratio was also the lowest of the year at 6.50%, with a volume of non-performing loans of 26.250 million euros, down from 26.320 million euros in June, for a loan portfolio of 40.362 million euros.

Original Story: Agencia EFE | Madrid 
Photo: Photo by Victor Iglesias in FreeImages.com
Edition: Prime Yield

Business loans are being repaid with cheap liquidity from State aid

According to banking sources, a large number of companies have repaid their loans in full, using mainly the low-interest subsidized loans they have received from the State through TEPIX.

Many companies are repaying bank loans with the cheap state aid they have received under support programs to deal with the pandemic, sources say. The phenomenon has alarmed banks, which have high liquidity and want to transform it into new loans, while being criticized by the government for their poor performance in financing the economy.

The data of the Bank of Greece show that last July, despite the unexpected acceleration of tourism and the general good course of the economy, net inflows of new loans to businesses were -341 million euros, that is, the loans repaid were more than new loans disbursed to businesses.

Bank sources point out to Business Daily that this worsened in September.

According to bank executives, the companies received a very large boost of liquidity through government support programs, having received about 8 billion euros through 7 payment cycles, while subsidized loans have been granted, on extremely attractive terms, amounting to over 2 billion through TEPIX and other guarantee schemes. At the same time, the course of the economy, especially this year, is much better than the initial estimates.

According to banking sources, a large number of companies have repaid their loans to the banks in full, using mainly the low-interest subsidized loans they have received through TEPIX. Quite logically, they took advantage of the favorable situation by utilizing the financing they received to repay more expensive bank loans.

This trend concerns banks, as increased lending is a priority in broadening their revenues and mainly to replace revenues lost from NPL sales with new healthy interest income. According to Eurobank Securities, this loss of interest income will reach 1 billion euros this year. The repayment of loans combined with the issuance of bonds made by companies has the effect of reducing the demand for new loans at a time when the government is exerting great pressure on banks to increase lending to the economy.

The situation also worries the government, which wants state aid to reach the market and subsidized loans to be transformed into investments, recruitment and expansion of activities, something that has not been done so far. The defensive stance of companies is typically reflected in the accumulation of deposits.In total, from December 2019 until July 2021, business deposits have increased by + 51% and amount to 35.28 billion euros, while household deposits, in the same period, rose by + 12.6 % and amount to 131.37 billion euros.

Original story: Business Daily | Staff
Photo: Photo by Pierre Amerlynck in FreeImages.com
Edition: Prime Yield  

NPL ratio fall to new low before moratoria end

As the Portuguese banks continue to clean up their balance sheets, this has been reflected in an improvement in the levels of non-performing loans (NPL), despite the impact of the pandemic. The NPL ratio stood at 4.3% at the end of June, down 0.6 percentage points from the end of 2020. Still, NPL stock amounted to €13.5 billion.

After peaking in 2016 (17.9%), the NPL ratio have maintained a downward trajectory in recent years; a trend that the Covid-19 pandemic has not yet halted, although the reduction has been at a less intense pace in recent quarters.

Over the past four and a half years domestic banks have cleared more than €30 billion of non-performing loans from their balance sheets and managed to achieve a ratio below the 5% that is required by national authorities. The NPL ratio is today at its lowest level since 2008, according to official statistics.

If we count impairments, the NPL ratio is even lower: 1.9%, representing about €5.99 billion in toxic loans.

Original Story: Eco | Alberto Teixeira 
Photo: Photo by Armindo Caetano in FreeImages.com
Edition & Translation: Prime Yield

Intrum buys a €1bn portfolio from Cerberus and removes it from secondary market

Intrum has completed one of the largest deals since the pandemic began, acquiring a portfolio of 100,000 unsecured loans worth 1.000 million euros from Cerberus and shaking up the secondary market.

The portfolio consists of 100,000 unsecured loans, mainly consumer loans, although there is also a part of corporate finance. These loans are part of some of the portfolios previously acquired from banks by Cerberus and managed by Gescobro.

Named Project Segura, the operation has been advised by Alantra and involves a significant movement in the secondary market. That is to say, instead of buying directly from the bank or institution where the defaults have occurred, it has been carried out between collection managers. 

Even before covid, the debt collection industry expected an upturn in secondary market transactions, something that did not happen due to the paralysis of the sector as a result of the pandemic. The operation, according to market sources, shows that movements in the sector are being reactivated. Unsecured loan portfolios are usually sold at discounts of more than 80%, although in the secondary market the discount is greater.

In fact, several operations are already underway. Banco Santander has put up for sale a portfolio of 600 million euros in non-performing loans (NPL) to SMEs, a project called Titán, which is being advised by Alantra, as reported by El Confidencial. The Cantabrian bank has already sold two portfolios of NPL at the beginning of the summer, for a nominal value of 800 million euros.

Waiting for more defaults

Expectations of defaults due to the effects of the crisis anticipate a boom in impaired credit portfolios, especially in consumer and corporate lending. However, the economy is still supported by cheap financing, both by the stimuli of the European Central Bank (ECB) and by public guarantees through the Official Credit Institute (ICO), and also by temporary lay-offs (ERTE). The moratoriums have also prevented an initial wave of defaults, although banks such as BBVA and Sabadell have already recorded increases in refinancing, which are usually the prelude to defaults. 

As a result, default forecasts have improved in the financial sector, and it is unclear when the expected upturn in defaults will arrive and on what scale. 

As shown by the purchase of Intrum, more movement is expected in the secondary market. In other words, entities will sell large portfolios of unrecovered loans through their servicers, given the different appetite and strategies in the recovery management sector. With this acquisition from Cerberus, Intrum approaches 53.000 million euro under management in Spain, where 2,000 of its 10,000 global employees are based. 

Original Story: El Confidencial | Óscar Giménez
Photo: Intrum website
Edition & Translation: Prime Yield

More than 28% of Greek households had bank loans in 2020

A 28.4% of Greek households were burdened with bank loans (excluding mortgages) in 2020, of which 20.1% had one loan, 6.4% had two loans, 1.6% had three loans and 0.3% had four loans, while 71.6% of Greek households did not any loan, Hellenic Statistical Authority revealed.

The statistics service said that 16.1% of poor households had at least one loan, while non-poor households with at least one loan totaled 30.9%. Of these, 55.1% of loans covered the purchase of assets, 45.8% daily expenses, 9 %were for education, 7.7% for a vehicle, 6.9% for holidays, 3.7% for medical services and 1.7% financed a private company while 1.4% refinanced a loan. Bank or other financial institution accounted for 98.3% of funding, followed by a private source (relatives, friends, etc) with 1.5%.

The average sum paid in interest and capital for household loans (excluding mortgages) was 236.15 euros. Greek households spent 295.82 euros last month to buy food and beverages, 120.46 euros to consume food and beverage outside the home and 150.36 euros for the use of private transport means.

Original story: The National Herald | Athens News Agency 
Photo: Photo by Takis Kolokotronis in FreeImages.com
Edition: Prime Yield

KKR, Tilden Park and Waterfall compete for CaixaBank’s bad credit

CaixaBank put for sale the Project MoMa, a portfolio of 5,700 problematic loans with a nominal value of 576 million euros. KKR, Tilden Park and Waterfall are the finalists of the bidding process launched by the bank.

Being advised by KPMG in the sales process, CaixaBank expects to close the deal before the end of the year.

The Project MoMa comprises 5,700 loans from 3,700 creditors who initially requested 576 million euros. The unpaid amount stands at 495 million and the portfolio is secured by 4,500 properties located mainly in Madrid, Barcelona and Seville. These properties are valued at 775 million, above the value of the loans.

The three finalists are the most active firms in this business after the outbreak of the pandemic. KKR manages all types of non-performing loans and real estate for third parties from the Hipoges platform. Tilden Park, for its part, last year closed the purchase of loans from Banco Sabadell. Finally, Waterfall, founded by former CaixaBank executives, bought mortgage loans from the Catalan bank at the end of 2019. The operation covers some higher quality assets – properties worth more than one million euros – in locations such as Mallorca, Boadilla del Monte, Pozuelo de Alarcón, the Costa Brava, Xàtiva and Barcelona.

Original Story: EJE Prime | News 
Photo: Caixa Bank website
Translation & Edition: Prime Yield

Piraeus Bank in talks with Bain Capital to sell leasing portfolio

Piraeus Bank, one of Greece’s four largest lenders, is in talks with Bain Capital to sell a portfolio of leasing contracts as part of efforts to clear non-performing loans (NPL) from its balance sheet, bankers close to the talks told Reuters.

Greek banks have been making headway in their bid to sell, write off or restructure billions of euros of bad debt accumulated during the last financial crisis.

Recently, ratings agency Moody’s upgraded the four largest Greek banks and gave them a positive outlook, saying the move was primarily driven by their improving asset quality and good prospects for further boosting their recurring profitability.

Piraeus Bank’s portfolio of leasing contracts, dubbed project Sunshine, has a gross book value of about 530 million euros.

Bain Capital is a multi-asset alternative investment firm.

In June last year Bain Capital Credit, a unit of the group, bought 1.6 billion euros of corporate NPL from Greece’s National Bank.

In 2018, Piraeus Bank agreed to sell a 1.45 billion euro portfolio of secured, non-performing business loans to Bain Capital Credit as part of moves to reduce its bad debts.

Original story: Reuters | Staff 
Photo: Piraeus website
Edition: Prime Yield

CGD and Novo Banco choose the buyers for their NPL portfolios’ by mid October

Portugal’s Novo Banco (NB) and Caixa Geral de Depósitos (CGD) have two portfolios of non-performing loans (NPLs) for sale, called Harvey and Mercury, respectively. Tenders for the purchase of the respective portfolios are in the final stages and there are several interested parties in the race, and buyers/winners should be chosen on 15 October, 2021. 

According to the newspaper Jornal Económico, which quotes a market source, there are three candidates in the final stage of the tender to buy the NPL Harvey portfolio and four in the final race for Mercury. 

For each of the operations four interested parties have been chosen to move on to the negotiation phase, but in the case of NB one of the candidates, Bank of America Merrill Lynch, will not move forward, the paper said, adding that the three finalists for the Harvey project are the DDM Group, Deva Capital and DK Partners.

At stake are the debts of 20 single names – eight corporate and 12 real estate-related -, with the Project Harvey project encompassing NPL with a gross value of 640 million euros. 

As for the Mercury portfolio, one of the four funds interested in buying is, according to Jornal Económico, the North American Cerberus. This is a granular portfolio and not of large debtors, with CGD’s portfolio being of collateralised (secured) NPL. 

The Mercury portfolio comprises 100 million euros of residential NPL and a small pool of REOs [real estate owned] in the amount of 10 million euros.

Original story: Jornal Económico | Maria Teixeira Alves 
Photo: CGD website
Translation & Edition: Prime Yield

GREECE Greece’s NPL ratio to fall to single digit next year

The Greek banks’ non-performing loans (NPL) stock should fall to single-digit rate in 2022, Finance Minister Christos Staikouras said.

The correct, serious and methodical work done in the last two years, under the coordination of the former deputy Finance Minister George Zavvos, continues,” the Finance Minister said in an announcement.

“According to Bank of Greece data, Greek banks’ NPLs totalled 29.4 billion euros in June 2021, 20.3% of total loans, recording an impressive decline during the last two years”.

The stock of NPLs has fallen by around 46 billion euros since New Democracy took over the government of the country (it was 75.3 billion euros in June 2019) and around 78 billion down from the peak in March 2016 (107.2 billion euros).

This significant reduction is the result of an integrated and coherent strategy followed by the finance ministry through the successful programme ‘Hercules’ which has been expanded, and specific interventions implemented to contain the creation of a new wave of non-performing loans because of the pandemic crisis.”

Original Story: : Greek City Times |Athens Bureau
Photo: Photo by Jonte Remos in FreeImages.com
Edition: Prime Yield

Bank deposits rise in July to almost €172 billion

The bank deposits of individuals and companies stood at €171.7 billion at the end of July, a €1.8 billion increase from June, according to Bank of Greece data.

Corporate deposits increased by over a billion, including €477 million from insurance companies.

Overall, corporate liquidity stood at €35.3 billion at the end of July, €11.4 billion more than in March 2020, when the first pandemic lockdown hit the economy.

Insurance companies’ liquidity stood at €5.1 billion.

Term deposits declined by €976 million month-on-month to €31.6 billion, as lower interest rates have been dissuading depositors from locking in their money. 

Original StoryEkathimerini |News
Photo: Photo by Jonte Remos from FreeImages
Edition: Prime Yield

Spanish banks NPL rate at its lowest since 2009

Spanish banks’ non-performing loan (NPL) rate have retreated to its lowest since 2009.

According to the latest statistical series published by the Bank of Spain, in June the NPL from NFCs and households in the sheets of the Spanish banking institutions fell to 4.4%, compared with 4.55% in May, when it had risen slightly.

In fact, this 4.4% ratio is the lowest level recorded since March 2009, when it stood at 4.26%. It then began to climb month after month, reaching an all-time high of 13.62% in December 2013. 

Doubtful loans also fell by 1.76% to 54,218 million euros, the lowest volume in recent years.

Moreover, according to provisional data from the Bank of Spain, the volume of total credit increased by 1.6% in June to 1.232 trillion euros, after a slowdown in loans granted in the previous two months.

Original StoryCinco Dias | News
Photo: Photo by Victor Iglesias from FreeImages
Edition & Translation: Prime Yield

Portugal’s 5 larger banks with aggregated profits of €708 billion

The five main banks based in Portugal recorded, in the first half of the year, an aggregate profit of €708.4 million.

Together, Caixa Geral de Depósitos (CGD), Novo Banco, BCP, BPI and Santander Totta recorded aggregate profits of €708.4 million.

Novo Banco announced profits of €137.7 million in the first six months of the year, an improvement compared to the losses recorded since its foundation, in 2014.

Caixa Geral de Depósitos (CGD) recorded the highest profit among the five largest banks, with €294 million in the first half, after €249 million in the same period last year.

The second largest contribution came from BPI, with €183 million in profit, which compares with the 43 obtained in the first six months of 2020.

In fourth place, after Novo Banco’s profits, which place it in third place in the table of positive net results, was Santander Totta, with a profit of €81.4 million in the first half, compared with €172.9 million in the same period of 2020.

Finally, BCP profited €12.3 million, greatly impacted by losses of €112.7 million in the Polish operation, when it had profited €76 million in the first half of 2020.

Original Story: The Portugal News | TPL/ Lusa 
Photo: CGD website
Edition: Prime Yield

Alpha Bank to get rid of over €8 billion in NPL

Alpha Bank wants to get rid of over €8 billion in bad loans through securitization and other operations in 2022, aiming to reduce its bad loans ratio into the single digits.

In its Cyprus subsidiary, €2.2 billion in bad loans have been transferred to special purpose vehicles.

Cyprus and Romania will remain Alpha’s sole foreign subsidiaries.

Original Story: Ekathimerini | News
Photo: Alpha Bank website
Edition: Prime Yield

Servihabitat to manage €1.2 billion portfolio from Kutxabank

Servihabitat, the subsidiary of Lone Star (80%) and Caixa Bank (20%), won the contract to manage Kutxabank’s real estate asset portfolio, valued at €1.2 billion.

The bank’s portfolio is made up of 10,000 assets in Spain, concentrated in Andalusia and the Basque Country. Of this, 50% is residential and commercial, and the other half is land.

Iheb Nafaa, CEO of Servihabitat, explained: “Our commitment is to become a servicer with the guarantee of offering a quality service with a differential value that sets us apart from many other competitors. As a multi-client servicer with exclusive management capacity for our clients, and with nationwide territorial capillarity, we have been strategically reinforcing our structure to continue to be a benchmark in the sector.”

Neinor has held the contract until May 2022 for seven years but was eliminated in the process at the beginning of July. From that month, Servihabitat will take over for the next five years.

In 2020, Servihabitat closed 12.2 % more deals than in 2019. By 2021, it has focused its strategic plan on the management of land, mobilising land markets that will enable it to expand the supply of housing.

Original Story: El Confidencial|Ruth Ugalde
Photo: Photo by Philipp K for FreeImages
Edition: Prime Yield 

NBG selects DoValue-led consortium as preferred bidder

DoValue revealed that a consortium of the financial company, Bain Capital and Fortress has been chosen by National Bank of Greece (NBG) as the preferred bidder in relation to Project Frontier for a short period of talks.

NBG, Greece’s second-largest lender by assets, is looking to offload a portfolio of soured loans known as Project Frontier.

Earlier, NBG said it was in exclusive talks with the consortium for the sale of non-performing credit.

Original Story: Reuters| Reuters Staff 
Photo: Photo by Michalis Famelis / Wikimedia Commons
Edition: Prime Yield

Santander puts for sale its credit exposure in Hesperia

Santander is negotiating the sale of its credit exposure on the Hesperia hotel group, a 136 million euros loan portfolio, with with several opportunistic funds, such as Apollo, Bain Capital and Bybrook.

According to the Spanish journal El Confidencial, the bank has already received offers for this loan portfolio, which includes eleven of the group’s hotels and offices as collateral.  Led by Santander itself, the transaction is not expected to be heavily discounted, as the loans are up to date with payments. 

The sale represents Santander’s exit from Hesperia’s credit pool. One of the largest hotel groups in the country, in 2014 the company controlled by the Galician Castro Sousa family had to sell assets to meet bank requirements to refinance debt, at a time when the bank was already Hesperia’s main financier. 

At the present, Hesperia is awaiting approval from the State Industrial Ownership Corporation (Sepi) for a 55 million euros aid package to deal with the effects left by Covid-19, which has the tourism and hotel sector as one of the main victims. Specifically, last March the group joined other hotel companies that applied for aid from the Solvency Support Fund for Strategic Companies managed by the Sepi with European resources.

Hesperia has a portfolio of 28 hotels in Spain with a total of 4,500 rooms, as well as four establishments in Venezuela. The group’s expansion plans for 2021 have so far focused on Latin America and the United States. In 2019, Hesperia posted revenue of 137 million euros, in line with the previous year, and made a profit of 15.5 million euros, up from 22 million euros in 2018. 

In recent months, transactions have been carried out on hotels operated by Hesperia on a leaseback basis. In July, the Grifols family, through the company Scranton, acquired the Hesperia Presidente hotel in Barcelona, located on Avenida Diagonal, for 125 million euros (including CAPEX). Likewise, in March 2020, the fund manager Meridia acquired the Hesperia Barcelona del Mar hotel, located on Calle Espronceda in the Catalan capital.

Original Story: Eje Prime | News
Photo: Facebook Santander
Edition & Translation: Prime Yield 

BCP looks for new owners for a €145 million REO and NPL portfolio

Portuguese bank BCP is looking for new owners for a portfolio made of nonperforming loans (NPL) and real estate (REO) in Algarve with a gross value of 145 million euros, according to digital ECO News. 

Most of the assets are connected to the luxury resorts Castro Marim and Monte Rei, with the portfolio in question to be named “Project Green” after the golf camps included in those touristic complexes. It also includes other real estate assets located in Tavira, São Brás de Alportel and Loulé, notes Eco.

According to the same source, the bank lead by Miguel Maia is already in the market taking conversations with interested potential buyers.

Castro Marim and Monte Rei resorts had initially been included in the “Project Ellis”, which sale to David Kempner was completed by the end of 2020. At the time, they were reportedly taken from that portfolio.

With over 400 hectars of land. Monte Rei is located a few kilometres from Vila Nova de Cacela, and includes villas, houses, flats and plots for construction, besides golf courses designed by the American Jack Nicklaus. The Castro Marim resort also has golf courses, villas and individual plots.

Original Story: Jornal de Negócios | Staff
Photo: MBCP website
Edition & Translation: Prime Yield

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