NPL&REO News

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

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

CGD, Santander and Novo Bank relaunch NPL sales

Caixa Geral de Depósitos will go ahead with the sale of a nonperforming loan (NPL) portfolio of more than 120 million euros in the second half of the year. 

According to Economico, the Portuguese State owned bank has already launched the sales process of the Mercury Project, a granular portfolio of collateralised NPLs with a total value of 128 milion euros, and which not include NPL from large debtors.

At the same time, the Portuguese diary added, both Novo Banco and Santander Totta are also triggering the sale of their own NPL portfolios. 

Original Story: Jornal Económico |Maria Teixeira 
Photo: CGD Website
Edition & Translation: Prime Yield

NPL won’t be a brake on credit

The “expectation of continued support for the most affected sectors” by the pandemic together with the end of the moratoria regime leads the Portuguese banks to rule out an increase in credit restrictions. And this time, bad credit won’t be a brake to new financing, concludes the Bank of Portugal (BdP) in one of its latest papers, according to a new from ECO.

“Progress made by the banking system since the last crisis to make it more robust and resilient to shocks will be contributing to a lower impact of NPLs on lending.”, says the BdP.Even with the deadline for the moratoria ending in September, the surveyed banks are calm. According to the Bank of Portugal, the largest national financial institutions “expect the NPL ratio to have practically no impact on lending criteria,” which, according to the survey, have become only slightly more restrictive than before the pandemic.

Original Story: ECO |Paulo Moutinho
Photo: Banco de Portugal website
Edition & Translation: Prime Yield 

Novo Banco puts the €640 million NPL Harvey Project for sale

Novo Banco has just put an 640 million portfolio of nonperforming loans (NPL) of major debtors up for sale. The institution led by António Ramalho wants to reduce the bad debt ratio from 8% at the end of March to 5% within two years.

With a gross value of 640 million, the Harvey Project is set up of loans in default from the bank’s 20 major debtors, including 8 corporate loans and 12 other loans linked to the real estate sector.

According to the online Eco news this is the new name given from the bank to the credit portfolio that was supposed to be Nata III.

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

Altamira Portugal expects 1 billion in new NPL until the end of the year

The new CEO of Altamira Portugal, Isabel Teixeira, is expecting a significant increase in new nonperforming loans (NPL) coming to the market within the news few months, she said in an interview to Económico.

Isabel Teixeira admits that by the end of the year the amount of NPL coming onto the market will reach the global value of 1 billion euros. “There are portfolios entering the market coming from practically all banks, and whose tenders are expected to take place by the end of the year,” the manager acknowledged.

In the same occasion, Altamira’s responsible in charge of the Portuguese market also spoke of the possibility of the state seeing the guarantees provided in the Covid lines executed and therefore being able to become a seller of NPLs, alongside the banks.

Original Story: Jornal Económico |Maria Teixeira Alves 
Photo: Altamira Linked In
Edition & Translation: Prime Yield

Novo Banco’s owner sold “Vilamoura” to Arrow for €100M

The US-based Lone Star has sold “Project Vilamoura” to a group of investors, including British fund Arrow Capital and businessmen Filipe de Botton and Alexandre Relvas.

The US-based Lone Star has closed the sale of the Vilamoura Project – which includes, literally, a part of Vilamoura – to British Arrow Capital and a number of investors, including Filipe de Botton and Alexandre Relvas, according to ECO. The “package” includes the Vilamoura marina, two companies and 21 plots of land with construction potential. The operation was closed for about 100 million euros, a value well below what was being asked initially, since the project also included Cidade Lacustre (expansion), which ended up being rejected at the end of last year.

It was in 2015, in a “competitive” process, that the owner of Novo Banco bought these assets. Two years later, at the end of 2017, it put them on the market for sale. Among some obstacles, it took another three years to get them sold. The deal was closed last week, according to ECO, and should have been around €100 million, a figure below the €180 million that Lone Star was initially asking for.

On the buyer’s side is the British fund Arrow Capital, which owns the Portuguese companies Whitestar and Norfin, and a number of private investors, including Filipe de Botton and Alexandre Relvas, partners of Logoplaste, and João Brion Sanches, founder of Norfin along with the two previous entrepreneurs. Contacted by ECO, both the Arrow Group and Filipe de Botton declined to comment.

The project comprises 100% of Vilamoura World’s share capital (the company that manages all these assets), 21 plots of land for development, 49% of Inframoura (the municipal company that manages Vilamoura’s public works) and, finally, the marina, which is the most interesting asset. “Opened in 1974, it is the largest in the country with 825 berths,” reads the project teaser to which ECO had access. The marina concession is valid until 2060.

In recent years, several projects have been completed in Vilamoura, resulting in 704 homes in the pre-crisis period (Victoria Boulevard, The Victoria Gardens, 1st phase of L’Orangerie, Villa Rosa Golf, Monte Laguna, The Victoria Residences and Laguna Golf) and 219 in the post-crisis period (Gardens Vilamoura, Laguna Village, 1st phase of Uptown, 2nd phase of L’Orangerie, Villa Nature and the 1st phase of Central).

For the future, among the various projects planned, there will be 3,658 housing units, totalling 566,374 square metres, says the teaser.

Original Story: Eco |Eco News
Photo: Vilamoura World Site
Edition: Prime Yield

Portuguese banks brace for worsening asset quality in 2021

Loan moratoria and other policy measures have protected Portuguese banks’ asset quality so far during the COVID-19 pandemic, but this may change in 2021 as many programs are unwound, DBRS Morningstar said in a report April 8.

Despite a doubling of loan loss provisions, the stock of nonperforming loans at a group of Portugal’s largest banks shrunk by more than a fifth in 2020, the credit rating agency estimated. Its sample included Caixa Geral de Depósitos SA, Banco Comercial Português SA, Novo Banco SA, Banco Santander Totta SA, Banco BPI SA and Caixa Económica Montepio Geral.

Banco de Portugal data shows a similar trend for the whole banking system, with 2020 loan loss charges — measuring total credit impairments as a percentage of average gross customer loans — nearly doubling to 1.03% from 0.52% in 2019, and the NPL stock dropping to €14.36 billion in 2020 from €17.20 billion a year ago.

NPL sales, write-offs and cures helped reduce the bad loan stock in 2020 and COVID-19-related policy measures have staved off the impact of the economic downturn on banks’ credit portfolios, DBRS Morningstar said.

“Our view is that asset quality may deteriorate from late 2021 with the eventual loosening of moratoria and other support schemes,” Nicola de Caro, senior vice president at the global financial institutions team of DBRS Morningstar told S&P Global Market Intelligence.

With over 20% of total loans under moratoria, Portugal’s banks are among the most dependent on such pandemic support schemes in Europe. The majority of these loans comprise exposures to small and medium-sized enterprises which are set to expire in the third quarter of 2021, DBRS Morningstar said.

At 2020-end, Portugal’s banking system had the third-largest stock of loans and advances under moratoria, of €41.5 billion, according to data by the European Banking Authority. Italy and Spain ranked first and second with a stock of €115.6 billion and €57.9 billion, respectively.

Bad loan risk

According to current estimates out of Portugal, up to 10% of loans currently under moratoria could “go bad” in the future, Olivia Perney Guillot, managing director at the financial institutions team of Fitch Ratings, said in an interview. Fitch expects asset quality to deteriorate in 2021 but some banks in southern Europe will be able to offset some of the negative impact through NPL sales and write-offs as they did in 2020, Rafael Quina, on the financial institutions team at Fitch Ratings, said.

The NPL ratio for loans in already-expired moratoria schemes in Portugal stood at 2.8% at the end of 2020, almost as high as the 2.9% in Italy but lower than the 4.2% in Spain, EBA data shows.

There will be wide differences in risk depending on the borrower type, Quina said. Residential mortgages, for example, would be typically less risky than exposure to unable-to-pay SMEs that are in the tourism sector, he told S&P Global Market Intelligence.

Based on its exposure, Portugal is the fourth most-dependent country on the tourism sector in the eurozone, DBRS Morningstar estimated in a Sept. 14, 2020 report. The country ranked second by the share of tourism sector contribution to GDP — 16.5%, and third by the share tourism employment to total employment — 18.6%, according to the report.

“In DBRS Morningstar’s view, the longer the epidemiological situation continues, the greater the risk that the travel and tourism industries in these countries will suffer more lasting damage, resulting in permanent job losses and closures of some businesses. Even after the travel restrictions are largely lifted across geographies, the fear of travel might linger for longer,” the rating agency said at the time.

Original Story: SP Global| Vanya Damyanova
Photo: Photo by Alfonso Romero from FreeImages.com
Edition: Prime Yield

Government negotiates loan for a further injection into Novo Banco

The Portuguese government is trying to arrange finance so that the Resolution Fund can channel another tranche of money into Novo Banco.

The bank that emerged from the BES debacle has asked for €600 million this year (when the State Budget only allowed for €475 million). 

The government apparently seems prepared to spend €400 million, but first it has to raise it. Bloco de Esquerda has said Novo Banco should get another cent.

Original Story: Portugal Resident| Natasha Donn
Photo: Novo Banco website
Edition: Prime Yield

Almost a third of Portuguese companies in state of “significant debt”

Roughly 30% of Portuguese companies suffered “significant defaults” in 2020 despite the various State led injections of liquidity and fiscal stimuli designed to “atentuate the economic effects provoked by the pandemic”, reveals a study on ‘management of credit risk’ promoted by Spanish agencies Crédito y Caución and Iberform.

Original Story: Portugal Resident| Natasha Donn
Photo: Photo by Pasqualantonio from FreeImages.com
Edition: Prime Yield

Portugal’s frozen loan repayments decline further in the beginning of the year

The volume of loan repayments suspended by Portuguese banks under a scheme to help businesses and individuals through the pandemic slipped in January to 45.7 billion euros ($54 billion), further retreating from a peak in September.

The latest figure released by the Bank of Portugal compares with 46.1 billion euros of the so-called loan moratoriums, including capital and interest, in December and an all-time high of 48.1 billion in September.

The central bank said 54,000 companies had access to the scheme in January, for a total of 24 billion euros, or 33.2% of total corporate loans.

“The accommodation and restaurant companies were the ones that stood out the most, with 57% of their total loans covered by this measure,” it said, without giving further details.

Portugal’s once-booming tourism sector suffered its worst results since the mid-1980s last year due to the pandemic.

Private individuals suspended 20 billion euros of loan repayments, or 16% of their total loans, the financial authority said, adding that mortgage loans made up 86% of that amount.

The freeze, in part aimed at avoiding a jump in bad loans at banks that spent the past five years reducing their ratios of non-performing loans, will end on Sept. 30. Some loans, namely mortgage loans, will start paying interest as of April.

Portugal’s largest listed bank Millennium bcp wants the government to extend the loan repayments freeze for pandemic-hit tourism companies beyond September if the health crisis has not been overcome by then, Chief Executive Officer Miguel Maya said in February.

Portugal’s lenders have cut their average non-performing loan (NPL) ratio to around 5% of total credit, but it is still almost twice the European average. 

Original Story: Reuters | Sérgio Gonçalves 
Photo: Photo by Armindo Caetano from FreeImages.com
Edition: Prime Yield

Portuguese Government is discussing extending credit moratoria with banks

Economy Minister Pedro Siza Vieira admitted, earlier on February, the extension of credit moratoria or other solutions to support the payment of these credits. “We are discussing what to do about the debt that exists and, eventually, an extension of maturities may be justified in this sector,” the minister said in a webinar.

The minister admitted that he is discussing the issue of moratoria with the Bank of Portugal (BoP) and the Portuguese Banking Association (APB). On the table “it is being discussed not only the suspension of payments that we determined until September,” but the “extension of even the term of the remaining debt.

He added: “It’s something that we have to see to what extent it is justified, and with what scope”.

The minister’s statements open the door to extending the term of loans, a form of credit restructuring, as some business associations are considering.

Admitting that company reserves are “exhausted” and equity “further destroyed”, Siza Vieira said that the Government “is aware that it will need to launch corporate capitalisation instruments”. “We will need to make a supplementary effort on the public and private side to endure these months,” he added.

In relation to instruments to support this recapitalisation, the minister said that “quasi-equity, convertible debt, or participating loans” solutions were being studied.At the same online conference held on Tuesday, 9 February, promoted by the Portuguese Tourism Confederation, the chairman of BCP Miguel Maya had already advocated strengthening measures to support tourism, including the continuation of credit moratoria for companies and workers in the sector.

Original Story: Público | Rosa Soares
Photo: Photo by Magda S in FreeImages.com
Edition & Translation: Prime Yield

ECS to sell €1.5 billion in restructuring funds

ECS – Sociedade Gestora de Fundos de Capital de Risco was put up for sale at the beginning of the year, in an operation that came public after the company owned by António de Sousa and Fernando Esmeraldo received expressions of interest from international funds, Portuguese daily Jornal Económico reported.

The newspaper said that the proposals that have been received by ECS cover several perimeters, ranging from global purchase offers that cover all funds to partial offers, involving only some of the four active funds. The process has already attracted interest from several international funds, such as Bain Capital, Blackstone, Fortress, Cerberus and Arrow/Norfin.

According to the newspaper, the three largest ECS funds that are up for sale are worth almost €1.5 billion. The proceeds of the sale will go to the banks that own the participation units in these funds: Caixa Geral de Depósitos, BCP, Novo Banco, Santander Totta and Oitante (ex-Banif).

Original Story: Eco|Newsroom
Photo: Palácio do Governador Hotel website
Translation: Prime Yield

Portuguese banks’ NPL could reach 9% with end of moratoriums

Moody’s has a negative outlook on Portuguese banking. And it is concerned about the impact that the end of moratoria may have on asset quality. The rating agency anticipates an increase in non-performing loans this year and a fall in results due to the growth in provisions. And it warns that Novo Banco could be an additional burden.

“We have a negative outlook for the Portuguese banking sector, in line with several other European countries. What this negative outlook wants to reflect is the high uncertainty in the operating environment that could translate into weaker banking fundamentals,” explained Pepa Mori, vice president and senior credit officer for European banking at Moody’s, at a digital conference on Portugal organised by the agency on Wednesday.

“Our main concern regarding Portuguese banking is that the improvement in banks’ asset quality that took place in 2020 will suffer a sharp reversal as the government’s measures to support debtors – such as guaranteed credit lines or credit moratoria – start to disappear,” he warned.

Currently 22 per cent of financial institutions’ portfolios are under moratoria, a regime that is in force at least until September this year, with a further extension not ruled out. Only then will it be possible to see the impact of these measures on banking, but Moody’s estimates are that the non-performingloans (NPL) ratio will rise to 9% this year, from 5.5% at the end of last year.

In addition to the impact on asset quality, the worsening of non-performing loans will also force an increase in provisions to cover possible losses, which further reduces net income (already squeezed by the impact of the pandemic on financial margins).

On the one hand, Pepa Mori recalled that “Portuguese banks entered the crisis stronger than in the previous financial crisis”, which is “very important” in terms of capital and liquidity. “Portuguese banks compare positively with European ones,” he stresses.

Original Story: ECO | Leonor Mateus Ferreira
Photo: Photo by Ricardo Gurgel in FreeImages.com
Edition & Translation: Prime Yield

BPI sells a €300 Mn NPL portfolio to LX Partners

Portuguese private bank BPI has just sold a nonperforming loans (NPL) portfolio to the LX Partners fund. The named “Project Lime” includes 30,000 credit contracts, with a gross book value of €300 million.

According to official sources from the bank, the deal was completed in January 27th , and comprises about 30,000 unsecured credit contracts, the same is saying that these loans have no collateral associated. 

Original Story: ECO |News
Photo: BPI Facebook
Translation & Edition: Prime Yield

Tikehau and Albatroz are about to complete the acquisition of Project ZIP

The joint venture between the funds Tikehau and Albatross is about to complete the acquisition of Project ZIP, agreeing to pay 320 million euros to take the portfolio comprising 4,400 houses owned by several Portuguese banks.

Funds Tikehau and Albatross left behind Cerberus, which was also part of the short list of candidates invited to present binding offers for the purchase of this portfolio, placed on sale in July. The two funds selected will now start the last negotiation stage for the conclusion of the operation, which should take place by the end of March.

According to sources close to the deal consulted by Eco, «the two funds offered a super-competitive bid. It is a great sign for the Portuguese market and for other potential sellers».

This Consortium should acquire Project Zip for an amount between 300 and 320 million euro, less than the 360 million euro the project was estimated at.

It should be recalled that this project includes 4.435 housing units, most of them already with tenants, located mainly in the urban centres of Porto, Lisbon and Setubal. The buildings are part of several real estate investment funds for housing rental (FIIAH) managed by Norfin and owned by several banks, amongst which Novo Banco, CGD, Montepio, Millennium bcp and Santander Totta.

90% of these buildings are rented. Projetec Zip currently generates 14.6 million euro in annual revenues, which could increase to 25.8 million euro, according to the same source.

Original Story: Iberian Property |Ana Tavares
Photo: Photo by Svilen Milev, in FreeImages.com
Edition & Translation: Prime Yield  

Banks under pressure: DBRS leaves a warning to Portugal

The European banking business will continue under strong pressure in 2021. Despite the expected economic recovery, the burden of non-performing loans will weigh heavily on the financial institutions in 2021, according to the Canadian rating agency DBRS, which points especially to countries like Portugal, Spain and Italy.

“The outlook for European banks remains challenging in 2021. We expect the revenue pressure banks faced in 2020 to continue in 2021,” says the DBRS report released this Thursday. “Given the tough revenue environment and low returns, reducing operating costs remain a clear priority, and the pressure to improve returns is likely to lead to further domestic consolidation in some countries.”

The pandemic generated a deep economic crisis, which has not yet materialised in a worsening of non-performing loans (NPLs) due to government support measures such as moratoria and credit lines with state guarantees. “Nonetheless, it is clear that loan losses will increase when government support ends. The trajectory of NPLs will remain a function of the length of economic restrictions, overall economic impact, as well as any additional support measures,” the agency warns.

The latest available data refers to the first nine months of 2020, and the DBRS analysis (which included 40 European banks, namely two Portuguese banks: Caixa Geral de Depósitos and BCP) indicates that there has already been an increase in NPL levels in Norway, Germany and the Netherlands mainly due to very low bases.

However, these are not the countries most at risk. “Banks in Portugal, Italy and Spain continued to reduce NPLs in 9M 2020, however, these countries still hold high levels of NPLs and have high NPL ratios relative to other European banks and above the average of the sample,” the agency notes. “There has been a large proportion of borrowers resuming payments after the end of the moratoria. But the capacity of borrowers to make payments depends on the economic shock experienced in each country.”

The beginning of 2021 arrived with new lockdowns in a number of European countries, including Portugal, so the economic impact of the pandemic is still uncertain. The extent of the restrictions will impact asset quality and the cost of risk in 2021.

“Capital levels remained solid in spite of weaker earnings. However, we expect the deterioration of asset quality in 2021 to trigger an increase in risk-weighted assets. In addition, internal capital generation could reduce given lower earnings and the resumption of dividends payment,” DBRS adds.

Original Story: ECO News
Photo: Photo by Sergey Klimkin in FreeImages.com

Whitestar closes purchase of a NPL portfolio to BCP

BCP bank has closed the sale of a NPL portfolio, called “Projeto Webb”, to the consortium Group Arrow/Christofferson, Robb & Company (CRC) confirmed Whitestar Asset Solutions, a company of the Arrow Group specialized in the management of credit portfolios (NPL) and real estate.

This is a more granular portfolio whose initial value was 450 million euros, but which has been adjusted to 270 million euros.

With this transaction, in addition to the purchase of the NPL portfolio from the Novo Banco, named “Carter”, announced in December, Whitestar Asset Solutions now manages over 9 billion euros in assets.

Novo Banco sold in December a portfolio of unproductive assets with a gross book value of 79 million euros for about 37 million. This was a portfolio made up of small secured and unsecured loans, i.e. it includes both collateral and non-collateralised loan contracts.

The “Carter” operation, unlike others over the past two years, does not include assets covered by the Contingent Capitalisation Facility under the Resolution Fund.

In all, in 2020 Whitestar won the management of four portfolios of NPLs (bad loans). After winning the management of two portfolios of NPLs sold by Santander (BST52 and 53), Whitestar confirms that in December, in two competitive processes, Arrow Global’s fund (sole shareholder of the company led in Portugal by João Bugalho) won the tender for the purchase of two portfolios of unproductive assets, in consortium with Christofferson, Robb & Company (CRC). The first portfolio, the Webb portfolio, originated by BCP, has a total of 270 million euros in debt, while Carter, originated from Novo Banco, has 92 million euros in debt.

The market for the sale of problem assets remains active. The Novo Banco, for example, is in the process of selling the “Wilkinson Project” portfolio, worth 200 million. Eco reported that Davidson Kempner, Atena Equity Partners (in consortium with Blantyre), and Bank of America Merrill Lynch moved into the second phase. The market expects the financial institution to launch a new portfolio in the market earlier this year.

BCP has yet to close the sale of the “Ellis” portfolio, having been chosen as the buyer, according to Eco, the management company Davidson Kempner. Initially, the “Ellis Project” had a value of 300 million euros, but with the withdrawal of some credits the value of the portfolio was reduced to about 170 million, Eco also advanced.

Original Story: O Jornal Económico | Maria Teixeira Alves
Photo: Millennium bcp website
Edition/Summary: Prime Yield

Despite 9-month losses, Novo Banco halved its NPL stock up to September

Portugal’s Novo Banco, which emerged from the ruins of the collapsed Banco Espirito Santo, reported a 49% leap in its net loss for January-September to €853 million following provisions to discontinue its business in Spain.

The bank, 75% owned by Lone Star since October 2017 and 25% by the state-backed Portuguese Resolution Fund, said its results were also hit by provisions for bad loans.

The impairments and provisions for the exit from its retail network in Spain and for higher credit risk totalled around €727 million, the bank said, adding it also took a hit of €187.2 million due to the impact of the COVID-19 pandemic.

Earlier this year, sources told Reuters that Novo Banco was looking to sell its loss-making retail network in Spain, seeking to bolster its balance sheet and prevent further losses. The provisions reflect expected losses on any deal.

The bank has already sold assets in France, Asia and Cape Verde.

Novo Banco’s recurrent net income fell 30% to €98 million, but the bank said the results showed its “value-creation capacity and sustainable profitability”.

Net interest income, a measure of earnings on loans minus deposit costs, increased 9.3% to nearly €373 million.

The lender halved its non-performing loans (NPL) to €2.8 billion in September, after it sold problematic asset portfolios, and cut its NPL ratio to 9.7% from 19.9% a year earlier.

Original Story: Reuters |Sérgio Gonçalves 
Photo: Novo Banco website
Edition: Prime Yield

Millennium bcp’s NPE fell by €1 billion from a year ago

Portugal’s largest listed bank Millennium bcp reported a 46% drop in its nine-month net profit to €146.3 million, dragged down by higher provisions and impairments in the wake of the coronavirus pandemic.

However, its net interest income (NII), a measure of earnings on loans minus deposit costs, was little changed at €1.15 billion from a year ago, the bank said in a statement.

On a positive note, its core net income – NII plus net fees minus operating costs – grew 1% to €835.2 million.

But loan provisions increased 25% to €374.2 million in January-September 2020 from a year ago, while other provisions and impairments skyrocketed 126% to €176.4 million, the lender said.

“We have significantly reinforced impairments in the context of the pandemic. (We’re) adapting the business to the crisis. We have moved from a growth mode to a balance sheet protection mode,” Chief Executive Miguel Maya told a news conference.

Portuguese authorities in March said bank customers could suspend loan repayments, in a move aimed at relieving pressure on businesses and individuals during the pandemic. The moratorium has been extended until September 2021.

Millennium bcp said it had already granted more than 100,000 such loan repayment holidays.

The bank said its non-performing exposures fell by €1 billion from a year ago to 3.6 € billion in September after it sold various problematic asset portfolios.

Millennium bcp, whose main shareholder is China’s Fosun group, said its fully implemented Tier 1 common equity (CET1) capital ratio stood at 12.4%, comfortably above the required 8.8%.

Original Story: Reuters |Sérgio Gonçalves 
Photo: Millennium bcp website
Edition:Prime Yield

Top