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  

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

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

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

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

According to data from the Bank of Portugal, consumer credit fell by 8% to €714.9 million in April. Nevertheless, this figure for new loans represents a 1% increase compared to the same month last year.

The Bank of Portugal’s data reveals that consumer credit fell by 8% in April. Nevertheless, this figure for new loans represents a 1% increase compared to the same month last year.

The number of contracts fell by 8.6% to 135,043, representing an annual decline of 4.8%.

In terms of the number of new loans, the biggest drop was in credit card and overdraft agreements (-12% in one month), amounting to 71,822 agreements. This was followed by personal loan agreements, which fell by 5.1% in April to 45,059 agreements.

Finally, car loan contracts fell by 2.1% in April, amounting to 18,162.

In monetary terms, the largest decline continues to be in the ‘credit cards and overdrafts’ category, with new loans falling by 12.2% to 112 million euros.

Personal credit fell by 9.4%, with new credit standing at €320 million. Finally, new car credit fell by 4.6% in April, with the amount of new credit in this category reaching €238 million. Of particular note is the 32.7% drop in financial leasing, also known as ALD, for new cars.

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

The portfolio, which includes secured and unsecured positions involving around 22,900 loan agreements and approximately 5,600 customers, was sold to funds managed by a US-based asset manager.

Through a competitive process, BPI has completed the sale of a non-performing loan portfolio with a total gross value of around €82 million.

It was sold to funds managed by a US-based asset manager and includes both secured and unsecured positions, involving around 22,900 loan agreements and approximately 5,600 customers.

“This transaction reinforces BPI’s solid position, which maintains a low-risk profile,” the bank said in a statement.

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

The deal forms part of BPCE’s VISION 2030 strategic plan, designed to expand its operations in France, Europe, and beyond.

French lender Groupe BPCE has agreed to acquire a 75% stake in novobanco, a Portugal-based bank, from Lone Star Funds in a transaction valued at approximately €6.4bn.

The deal is the most substantial cross-border acquisition in the eurozone in over ten years and is part of BPCE’s VISION 2030 strategic plan, designed to expand its operations in France, Europe, and beyond.

Once finalised, the acquisition will make Portugal the group’s second-largest domestic retail market. Novobanco holds a 9% share in the individual customer segment and 14% in the corporate client sector within Portugal.

The bank serves 1.7 million individual clients and manages a corporate loan portfolio worth €17bn. Employing 4,200 staff, novobanco operates 290 branches and works with an extensive network of external partners.

In recent years, novobanco has become one of Europe’s more profitable banks, achieving a cost-income ratio below 35% and a return on tangible equity over 20%.

The acquisition offers BPCE geographical diversification by entering Portugal’s vibrant economy and enhances its balance sheet by increasing the share of variable-rate loans, thereby boosting its revenue structure.

This move follows the establishment of BPCE Equipment Solutions earlier in 2025 and an ongoing project to form a leading European asset manager with Generali. Following the acquisition, BPCE’s Common Equity Tier 1 (CET1) ratio is expected to stay above 15%.

BPCE will consult with employee representative bodies before signing the acquisition agreement. The deal is expected to close in the first half of 2026.

BPCE CEO Nicolas Namias said: “Novobanco possesses excellent fundamentals, strong growth potential and an already high level of profitability. For its part, BPCE is a major banking player in France notably thanks to the Banque Populaire and Caisse d’Epargne banking networks.

“With the acquisition of novobanco, BPCE would become a retail banking player in Europe and would actively participate in financing the Portuguese economy. The projected transaction marks a key stage in the execution of its “Vision 2030” strategic plan, announced close to a year ago.

“BPCE’s executive managers and employees are all particularly enthusiastic about the prospect of welcoming novobanco, its management and its 4,200 employees, in order to write a new chapter of growth, innovation and performance in Europe together.”     

Original Story: Future Banking | Author: Pradeep Bairaboina
Edition: Prime Yield

Portugal’s BPI has put another non-performing loan (NPL) portfolio up for sale, appointing KPMG as advisor.

The “Zinc” project consists of 99.8 million euros of NPLs, of which 77 million are unsecured and the remaining 22 million are considered risky but secured. This portfolio comprises NPLs from households (66%) and SMEs (34%) and is divided into two tranches.

 Tranche A is divided between households (58 per cent), SMEs (26 per cent) and insolvent SMEs (16 per cent). Tranche B, on the other hand, mainly concerns private borrowers with mortgage loans (93 per cent).7 The portfolio is quite granular, with an average loan size of around EUR 13.7 thousand. The private segment in tranche A has an average loan size of around EUR 7.3 thousand. Tranche B is secured by a number of real estate guarantees with a real estate value from the seller of around 37.6 million euros, 99% of which is classified as first lien.

The Bank has opened the non-vincible bidding for the month of April and expects to complete the sale process by mid-year.

Original Story: Jornal Económico | Author: Maria Teixeira Alves
Edition and translation: Prime Yield
Photo: jakub-zerdzick / Unsplashed

BCP has already closed the sale of its non-performing loan (NPL) portfolio, dubbed ‘Project Bright’.The winner was Hoist Capital, which was competing against the consortium of LX Partners and Balbec; EOS Partners; and LC Partners.

Jornal Económico understands that Hoist paid 16.5 million for the Non-Performing Loans portfolio, a portfolio with a nominal value of 80 million euros and made up of ‘unsecured’ credit, i.e. without real guarantees. This usually translates into heavily discounted operations.

These sales are aimed at cleaning up the balance sheet of problematic assets that weigh on the bank’s capital. BCP reached the end of 2024 with 134 million euros less in loans classified as Non-performing exposures (NPE) in domestic activity, closing the year with 973 million in non-performing loans, of which 373 million are loans in default for more than 90 days. The bank led by Miguel Maya has 90 per cent of its loans in Portugal classified as NPE covered by impairments.

In terms of real estate received for credit recovery, BCP reported that it fell from a (gross) value of 169 million euros in December 2023 to 92 million in 2024.

BCP sold 569 properties last year (compared to 820 in 2023), with a book value of 58 million, for 81 million euros. In other words, the sale value exceeded the book value by 23 million.

The net portfolio of repossessed properties fell by 51.9 per cent between December 2023 and December 2024.

BCP’s NPE ratio in Portugal in 2024 stood at 1.7 per cent.

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

Fewer costs and bad debts, more profits and deposits: that’s how 2024 looked for Portuguese banks. Not everything was positive: the transformation ratio fell again.

Bank profits in Portugal rose by 13 per cent to a record €6.323 billion in 2024, a year marked by the reversal of interest rates, according to the latest data published by the Bank of Portugal.

At the end of last year, the Portuguese banking system had a return on equity (ROE) of 15.2 per cent, 0.4 percentage points higher than in 2023.

Several factors contributed to the Portuguese banking system’s historic profit last year, including income from interest and commissions, but also the release of provisions and impairments, among others.

On the other hand, banks kept costs relatively under control, with the cost-income ratio rising slightly to 39.7 per cent, 2.7 percentage points higher than a year earlier, but almost 20 percentage points below the level recorded in 2020.

In terms of asset quality, the non-performing loan (NPL) ratio fell again to 2.4 percent in December, 0.3 percentage point lower than a year earlier.

Nevertheless, banks’ balance sheets still contained €7.8 billion euro of NPL, 700 million less than a year ago. Toxic loans net of provisions totalled 3.48 billion.

Indicators for the Portuguese banking system also show that although banks’ total assets grew from 442.2 billion in 2023 to 467.8 billion in 2024, the weight of banks’ assets in relation to GDP fell slightly to 164.2 per cent.

Customer deposits accounted for 73.9 per cent of banks’ assets, up 1 percentage point year-on-year.

The banks’ transformation ratio fell again, reflecting the challenges for banks to inject liquidity into the economy in the form of loans, falling from 78 per cent in 2023 to 75 per cent last year.

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

In the first quarter of the year, the sale of impaired banking assets is in full swing. At present, assets totalling around €300 million, including nonperforming loans (NPL) and real estate used as collateral, are on the market. This figure is the sum of BCP’s €80 million in NPL, BPI’s €99.8 million in NPL  (part of which is secured by real estate) and the  Zip Project’s 670properties put up for sale by Quest Capital, led by Carlos Vasconcellos Cruz, which manages the portfolio, with an initial valuation of €120 million.

Four parties interested in BCP’s Bright portfolioBCP has four funds interested in its NPL portfolio known as ‘Project Bright’.
The portfolio is worth €80 million and consists of ‘unsecured’ loans, i.e. without any real guarantees. This means that the operations are usually carried out at a large discount.

According to Jornal Económico, there are four binding bids for BCP’s NPL portfolio. In the running are the LX Partners and Balbec consortium, EOS Partners, Hoist Capital and LC Partners.

For its part, BPI has just launched ‘Project Zinc’ with 99.8 million in NPLs (which includes guaranteed real estate in part of the portfolio), of which 22.4 million are guaranteed.

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

The process of transposing the European directive to regulate the sale of non-performing loans, including mortgages and consumer loans in default, continues to be delayed. The bill, which reached Parliament last week, was sent directly to the Committee on Budget, Finance and Public Administration (COFAP), but no date has been set for its discussion.

Parliament’s attention is currently focused on the motion of confidence in the government, which will be debated and voted on this Tuesday and which, given the opposition expressed by several parties, could lead to the fall of the executive and the dissolution of the Assembly of the Republic. If this scenario materialises, the regime for the sale of bad or non-performing loans (NPLs), which should have been implemented by 29 December 2023, will remain suspended, leaving consumers without adequate legal protection, warns Público.

Delays in implementation have already led the European Union to take Portugal, along with other member states, to the European Court of Justice.

Original story: Executive Digest | Author: Pedro Zagacho Gonçalves
Edition and translation: Prime Yield

Diploma transposing EU directive sent to parliament. The delay prompted Brussels to lodge a formal complaint against Portugal.

The draft law transposing the European directive establishing rules for the sale of non-performing loans (NPLs) was already approved by the Council of Ministers (CM). This was the first step towards transposing the directive into national law, the deadline for which was 29 December 2023, prompting the European Commission to take Portugal to the European Court of Justice.

The government has “approved a bill to transpose the European directive, which harmonises the rules applicable to credit managers and credit purchasers and supports the development of secondary markets for non-performing loans (so-called NPLs) in the European Union, while ensuring that the sale of such loans does not prejudice the rights of customers (debtors),” according to the CM’s press release.

No further information has been given on the content of the proposal, but Member States have some room for manoeuvre to protect the interests of individuals, particularly when it comes to the sale of mortgage loans.

The next step in the transposition process will be taken by the Assembly of the Republic, where the government’s proposal will be presented and where a few days ago a bill from the Left Bloc on the sale of NPLs was rejected and two resolutions from the PS and Livre were approved, recommending that the government speed up the transposition and calling for the protection of individuals.

The legislation in question is important for families, as the sale of loans that they have stopped paying has taken place without a specific legal framework, with many individuals being informed of the sale by the buyer. E

At this stage, individuals are given the opportunity to repay the loans, but only in one lump sum, which, if they are unable to do so, results in the loss of the assets pledged as collateral. Individuals often complain about the lack of information and the use of aggressive methods to collect debts, especially when this task is outsourced to other organisations.

In its statement on the opening of proceedings against Portugal, the European Commission stresses that “Directive (EU) 2021/2167 attaches great importance to debtors and includes safeguards to strengthen consumer protection, such as restructuring measures and information requirements to increase the level of transparency in debt collection.

Information requirements to increase the level of transparency in the relationship with the creditor’.

When finally implemented, the effectiveness of the EU legislation will be diminished given the massive sales of non-performing loans already undertaken by banks operating in Portugal in recent years. From 2013 to 2023 alone, banks will ‘cleanse’ their balance sheets of more than 40 billion euros of non-performing loans, a process that will continue in 2024.

Original Story: Público | Author: Rosa Soares
Edition and translation: Prime Yield

Novobanco has already sold the €289 million NPL portfolio it put up for sale in the last quarter of last year. Northwall Capital paid 30.5 million euros. The portfolio will be managed by Whitestar.
Novobanco’s ‘Pegasus’ portfolio of unsecured non-performing loans, i.e. loans in default without real guarantees, has been bought by the UK fund Northwall Capital. Following this acquisition, the management of the portfolio, dubbed ‘Project Pegasus’, was transferred to Whitestar, part of the Arrow Global group, according to our sources.

The ‘Pegasus’ NPL portfolio consisted of 64,000 debtors with an outstanding value of €289 million. Northwall Capital paid 30.5 million euros for the portfolio, according to Jornal Económico.

On 26 September, Novobanco announced to the market that it would start an organised process to sell a granular portfolio of non-performing loans, known as the ‘Pegasus project’, with the aim of signing the transfer contract by the end of the year.

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

From the list of candidates for the purchase of the ‘Solaris Project’, EOS Partners has made the highest bid for the portfolio of non-performing loans (NPL) in Portugal and will therefore win the portfolio of problem assets.

According to sources close to the process, EOS stood out from the other bidders with a bid of €85 million, while the other candidates submitted bids of between €63 million and €66 million.

LCM Partners, Cerberus, Balbec-Lx Partners and NorthWall Capital were also in the running.

In Portugal alone, the value of the NPL portfolio was €870 million. In Spain, the Portuguese servicer put a portfolio of €480 million up for sale.

The ‘Solaris project’ in Portugal consists mainly of loans to individuals totalling €620 million and loans to SMEs totalling €200 million, with an average loan size of six thousand euros.

It is a secondary market operation, competing in the market with other NPL portfolios of major banks such as CGD, Crédito Agrícola, Novobanco, Santander Totta, BCP, Banco Montepio and Bankinter/Universo.

Servdebt, the Portuguese asset management and recovery company, has mandated Alantra to sell its own portfolio of NPLs in the Iberian Peninsula totalling €1.350 billion. The portfolio consists mainly (but not exclusively) of unsecured loans.

Eon Partners is a US-based alternative investment firm that invests in private equity, credit and capital markets.

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

Servdebt Capital Asset Management has completed the purchase of a portfolio of non-performing loans (NPLs) from Abanca, dubbed the ‘Gaia Project’. This is a portfolio of approximately €80 million of NPLs that were on the balance sheet of Abanca in Portugal.

The ‘Gaia Project’ is a portfolio of unsecured loans to individuals and small and medium-sized enterprises owned by Abanca.

The transaction was completed in December.

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

Novobanco has entered into a Non-Performing Loans (NPL) Sale and Purchase Agreement, without guarantees (unsecured) and related exposures (assets).

The announcement was made in a statement and the bank says that the contract was signed following the conclusion of a competitive sale process.

The completion this transaction, under the agreed terms, should have a positive impact on asset quality ratios, reducing the amount of NPLs by around €100 million and the gross NPL ratio to approximately 3.5 per cent (proforma to December 2024), reveals the bank led by Mark Bourke.

‘This is a significant milestone for Novobanco, enabling it to fulfil its strategy of convergence towards the EU average,’ in terms of the ratio of NPL to the total portfolio.

The transaction, carried out for 30.7 million euros, should have a positive impact on the 2024 income statement, contributing around €6 million to Pre-Tax Results and resulting in a 6 basis point increase in Capital Ratios.

The buyer and the name of the portfolio has not been disclosed.

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

Servdebt, the Portuguese asset management and recovery company, has mandated Alantra to sell its own portfolio of non-performing loans (NPL) totalling €1.35 billion, reports Jornal Económico in its weekly edition.

In Portugal alone, the value of the NPL portfolio totalled €870 million euros. In Spain, the Portuguese servicer has put a portfolio of €480 million up for sale.

The NPL – Non-Performing Loans portfolio for sale by the company led by Ana Esteves and Bruno Carneiro is essentially (but not exclusively) unsecured.

The operation, which has been baptised the ‘Solaris Project’, is ServDebt’s own portfolio.

This is a secondary market operation that will compete with other NPL portfolios of large banks.

The value of the bad debt portfolios on the market totalled €2.2 billion, including ServDebt’s portfolio.

The banks CGD, Crédito Agrícola, Novobanco, Santander Totta, BCP, Banco Montepio and Bankinter/Universo have various types of bad debt portfolios for sale, totalling 1.32 billion.

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

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