NPL&REO News

NPL secondary market gain momentum in Portugal, says EU

8 March, 2019

Although its nonperforming loan (NPL) ratio remains high, over the last few months there has been a considerable reduction in Portugal’s bad debt stockpile «as the secondary market gains momentum», says the European Union (EU) on its «Country Report Portugal 2019».

«Portugal continues to correct its macroeconomic imbalances. Although all main indicators are moving in the right direction, public and private sector debt and foreign debt are still significantly above the benchmarks set», says the report, adding that «This continues to have a negative impact on the country’s external position, where the pace of adjustment is expected to slow down».

According to this document, Portugal has made some progress in increasing the quality of its financial system, namely by increasing the efficiency of insolvency and recovery proceedings, reducing impediments to the secondary market for the resale of nonperforming loans, and improving access to finance for businesses.

«While the ratio of non-performing loans remains high, there has been a considerable reduction as the secondary market gains momentum», says the same document, adding that «Portuguese banks have steadily decreased their stocks of non-performing loans and non-performing loan ratios in line with guidance from the Single Supervisory Mechanism» and that «lenders either work out bad debts internally, jointly through a servicing platform or increasingly put them up for sale on the secondary market».

So, adds the EU, «as the Portuguese property market is experiencing a strong period of growth, the secondary market for non-performing loans (often backed by real estate) is becoming increasingly competitive, with many foreign players actively looking to purchase nonperforming assets».

In 2017, the total value of NPL secondary market transactions reached about €2.3 billion, but given the strong pipeline of new deals, «this figure is set to be surpassed in 2018», forecasts the EU.

Highlighting that «the decline in nonperforming loans (or ‘bad’ loans) along with the improved profitability is reducing the balance of risks in the banking sector», the documents also notes that the «aggregate NPL fell by roughly one third over the last two years», thanks mainly to the NPL disposal programmes.

Story: Prime Yield
Photo:FreeImages.com/Armindo Caetano

Novo Banco plans to sell even more NPL in 2019

7 March, 2019

Portugal’s Novo Banco will maintain the efforts towards the reduction of its nonperforming loans (NPL) stockpile along this year, preparing to launch soon the bidding process for another two bad debt portfolios: the projects “Nata 2” and “Viriato 2”.

«Yes, our aim is to close more NPL sales this year», said Novo Banco President, António Ramalho, during the bank’s annual results presentation.

These portfolios arrive into the market a pair of months after the sales completion of projects “Nata” and “Viriato”, which took place in the end of 2018. The larger NPL portfolio to be sold in Portugal ever, Project Nata was divided into two tranches: one with a gross book value of €500 million and other, larger, of €1.2 billion. Besides this, in the same period, the Portuguese bank have also sold its Project Viriato, involving more than 9,000 real estate owned (REO) assets.

Considering the «success» of these «toxic assets» sales, António Ramalho announced that «Yes, we will have the Nata 2 and the Viriato 2», ensuring that this will be another year for the bad debt shrinking.

«We have to do a very clear and precise NPL plan and deliver it to ECB. Its part of our programme», explained the president of the bank which was bought by US’s Lone Star in 2017 after former Banco Espírito Santo collapse in 2014. The goal, stresses António Ramalho, is that «the bank’s NPL ratio reach 5%», in line with ECB’s targets. As for the «bad bank» in which remains the burden legacy of Banco Espírito Santo, the NPL ratio should stand «close to 12%».

As revealed in the same occasion, Novo Bank recorded losses of €1.412 billion in 2018.

Original Story:Jornal de Negócios | Rita Atalaia
Photo: Novo Banco
Translation and Edition: Prime Yield

Mortgage concession boosts up to €10 billion in 2018

7 March, 2019

The mortgage concession boosted in Portugal along 2018, reaching almost €10 billion and hitting an eight-year high, informed Banco de Portugal (the Portuguese Central Bank).

According to the entity led by Carlos Costa, in December the national banks granted €903 million for mortgage loans, alone. This is the highest value registered over the past five months, with the total volume of mortgages granted in 2018 rising to €9.835 billion.

The figure represents a new high since 2010, the year before the Portuguese bailout, confirming an upward trend on mortgage concession over the last few months, reflecting an annual growth 19% in 2018 vis-à-vis 2017.

Original Story: Eco | Eco News
Photo: FreeImages.com/Miguel Saavedra
Edition:Prime Yield

More and more Portuguese consumers seek for credit cards

6 March, 2019

The growing consumer confidence, spurred on by the economic recovery, are supporting the increasing demand for credit cards by the Portuguese, who rely more and more on their cards to purchase items for which they might not necessarily have the money.

According to new data published by the Bank of Portugal, the amount of Portuguese seeking for credit from banks has also risen considerably, with the number of people who secured loans to buy cars going up in 2018, by 120,000.

In terms of credit cards, the increase of those in debt climbed by 43,000 with 2.29 million people currently using them to make purchases.

This is now the highest number of people in debt with their credit card companies since records were first taken by the Bank of Portugal in March 2009.

The amount of debt outstanding has also climbed strongly, and now sits at €3.25 billion, another new record.

The amount owed to financial institutions for vehicle credit has ballooned to a record high, and has reached €6.1 billion euros this year. Overall, 840,000 people are in debt with banks having secured credit to purchase a car.

The Bank of Portugal has warned of a steep increase in consumer credit, explaining that this is being driven by a reduction in the unemployment rate, and an increase in wages, though interest rates on these types of credits remain high. The banking regulator however pointed to increased competition among financial institutions having resulted in them easing on the spreads levied on top of existing interest rates.

This follows after the general approval of loans in Portugal reached a 15-year high in 2018. Figures indicate that a credit of € 4.66 billion was issued, for an average of €12 million a day.

Despite concerns over the ballooning debt among consumers, the number of people unable to meet their monthly repayments actually dropped in 2018 to their lowest in almost a decade.

Nonetheless, 137,000 people are unable to pay the minimum monthly value demanded from their credit card companies, while 61,000 people have defaulted on their car repayments.

In terms of mortgages, the number of home owners who are unable to meet their repayments has fallen to below 100,000 for the first time since 2009. But despite calls on banks to employ stricter rules in issuing mortgages, Portuguese were handed close to €10 billion to purchase real estate last year, which is up almost 20% on 2017.

Original Story: The Portugal News | Brendan de Beer
Photo: FreeImages.com/ Lotus Head
Edition:Prime Yield

Portugal’s top 6 banks sold €5.7 billion in NPL along 2018

4 March, 2019

The six largest banks operating in Portugal speeded up the sales of non-performing loans portfolios in 2018, with at least €5.719 billion having been passed on in this way, according to Lusa’s calculations.

Although Novo Banco – the successor entity to Banco Espírito Santo, which was wound up by the Bank of Portugal – is not to present its 2018 results until 1 March, at the end of the year it informed the market that it had sold to investment funds as many as 102,000 loan contracts for €2.15 billion.

Banco Montepio hasn’t presented its 2018 results yet too, but by the end of 2018 announced the sale of a portfolio including 10,000 loans worth €239 million to a company in Ireland.

As for the banks that have presented their results, Caixa Geral de Depósitos (CGD) last year sold €1.2 billion in non-performing loans and Santander Totta sold €1 billion in non-performing loans and real estate owned (REO) collateral, much of which were inherited from the former Banco Popular. BCP, by its hand, announced disposals of NPL valued €730 million last year, while BPI bank had completed bad debt sales worth €400 million until November.

Reaching 12% as to September 2018, the Portuguese banking sector NPL ratio is up to three times higher than the European Union 4% average.

Original Story: ECO |Lusa
Photo: Novo Banco
Edition:Prime Yield

OECD points out high NPL weight as one of the risks to Portuguese Economy

4 March, 2019

In a recent 140-page report about Portugal, the Organization for Economic Cooperation and Development (OECD) identifies the high weight of the non-performing loans (NPL) within the banking system as one of the main risks for the country’s Economy, despite “market improvements” over the last few years.

According to OECD, Portugal’s economy has moved back to pre-crisis levels and is expected to grow by about 2% a year between 2018 and 2020.

Comparatively low living standards, however, mean many Portuguese perceive themselves to be worse off than a decade ago.

However, the club of 36 rich nations recognizes the economic conditions in Portugal had «improved markedly» over the past few years, with unemployment falling 10% points since 2013 to below 7%, «one of the largest reductions in any OECD country over the past decade».

Strong exports had sustained growth in the years following the global financial crisis, underpinned by a tourism boom: travel and tourism exports grew at an annual rate of more than 10% between 2010 and 2017, and by 2017 accounted for almost half of all service exports, the report said.

Despite this growth, the poverty rate of the working age population remained high and subjective perceptions of wellbeing were below pre-crisis levels. This reflected «modest living standards compared with other OECD countries»and little convergence with those economies over the past few decades, the report added.

Since 2014 Portugal has been recovering from a deep recession that followed the European sovereign debt crisis and a tough economic adjustment programme overseen by the EU and the International Monetary Fund.

Further employment gains and rising real wages were likely to underpin future growth in consumption. But an expected slowdown among Portugal’s main export markets would act as a headwind to further export growth, the report added.

An increase in interest rates — potentially arising from a normalisation of monetary policy as the European Central Bank phases out its government bond-buying programme — posed a risk to business and household spending, according to the OECD.

Improvements in the fiscal balance had contributed to a fall in the public debt-to-national output ratio from 130.6% in 2014 to about 121% last year. The ratio, however, remained one of the highest among developed economies, reflecting a debt burden that «still limits the government’s ability to respond to future economic shocks».

Bank vulnerabilities also weakened the resilience of the Portuguese economy, according to the OECD. While NPL as a percentage of total lending have been reduced by more than 35% since their peak in 2016, the level of problem bank debt remained one of the highest among OECD countries.

Other risks included Brexit and rising protectionism, the report said. «Any significant increase in policy barriers in international trade» would also have a detrimental effect on Portugal as a «small, open economy», the OECD said.

Original Story: Financial Times | Peter Wise
Photo: FreeImages.com / Armindo Caetano
Edition:Prime Yield

Portuguese Banks with potential to securitize NPL

13 February, 2019

The Portuguese banks have potential to complete more non-performing loans portfolios securitization operations, following the European trend on using these financial instruments, noted the rating agency DBRS.

According to Alessio Pignataro, Senior Vice President, European ABS – Global Strucutured Finance, Portugal, Ireland and Italy are the countries were DBRS expects the banks to use these financial instruments to reduce a still high volume of non-performing loans (NPL), besides the new entries of Spain, Greece, Cyprus and, potentially, the United Kingdom.

«From a banking perspective, this measure enables faster NPL reduction and frees the management teams to focus on new businesses», Elisabeth Rudman, managing director and head of EU FIG told to Portuguese news agency Lusa, on the sidelines of a DBRS event about the theme in London.

Since 2016, the Portuguese banks completed two deals, a small number when compared to the 20 NPL securitization done by Italian banks and four other by Irish banks during the same period.

One of the Portuguese deals was led by Caixa Económica Montepio Geral when it sold the €580.6 million NPL portfolio “Evora Finance” in 2017, and the other one was closed last year by Santander Total bank, when disposed a €480.7 million NPL portfolio. DBRS rated both transactions “BBB” (low), noting though that “Évora Finance” is performing well above the initial forecast.

The rating agency also states the European Banks have made substantial progresses in reducing the huge NPL pile accumulated since the financial crisis, but several countries whose banks still have huge levels of NPL «still have a long way to go».

Legal and tax reforms were implemented in Portugal to help dealing with this problem but, in general the European banks keep struggling to collect outstanding debts and foreclose mortgages, besides the low yield profitability and pressures over the capital levels.

Original Story:Diário de Notícias | Lusa
Photo: Free Images.com /Alfonso Romero
Edition and Translation:Prime Yield

Bain Capital buys the €850 million bad credit portfolio “Atlantic” from Caixa

12 February, 2019

After its 2017 debut, throughout buying a €500 million portfolio, the nonperforming asset manager Bain Capital keeps investing in Portugal, having now closed the acquisition of project “Atlantico”, with a gross book value of 850 million, from the Portuguese bank Caixa Geral de Depósitos.

In its Report and Consolidated Accounts from 1^stSemester 2018, the Portuguese public bank announced it would be selling the non-performing loans portfolio named “Atlântico”. In the occasion, Caixa’s president, Paulo Macedo, stated that the public offer had attracted several potential buyers. According to him, this transaction would allow Caixa’s NPL ratio to be under 10%.

After completing two transactions, Bain Capital admits its plans to keep investing in Portugal. «I assume we’re going to [buy more]. (…) We like the fact this is a small market, and, because of that, some of our major competitors don’t participate that frequently», Alon Avner, Bain Capital Credit’s Europe responsible, explains.

Original Story: ECO
Photo: Caixa Geral de Depósitos
Translation and Edition: Prime Yield

Santander sold Cerberus the €600 million “Project Tagus”

11 February, 2019

Santander Portugal closed the sale of the €600 million “Project Tagus” to an affiliate of US Cerberus Capital Management.

According to information gathered by the Portuguese news platform ECO, the transaction was closed in December 2018; having a positive impact of € 50 million for the bank’s results last year.

This portfolio comprises toxic assets belonging to former Popular Portugal bank, having sparked the interest of Apollo, Bain Capital and Arrow Global.

During the bank’s results presentation, CFO Manuel Preto explained that these real estate assets and loans became Santander Totta’s property with the integration of Popular Portugal at the end of 2017. «We tried to quickly alienate these assets, because we believe the bank’s management should be focused on granting new credit to the economy and not managing portfolios which are already adequately provisioned and which do not add much to the bank’s results», quotes the same source.

Original Story: Iberian Property | Ana Tavares
Photo: Santander
Edition:Prime Yield

Portugal’s NPL stock is still too high, says ESM

8 February, 2019

Despite all the progress towards the reduction its NPL stock pile since 2016’s peak, Portugal’s bad debt level is still among the highest within the Eurozone, warns the European Stability Mechanism (ECB), while recalling the need to further enhance the efforts to reducing it.

At a conference organized by Fitch in Lisbon a few days ago, Matjaž Sušec, the assistant director of the Strategy and Institutional Relations of the ESM, noted, that the Portuguese banking sector is definitely more resilient, «but some of the challenges are still there».

Four recapitalizations allowed for the banking system to go through a major «clean-up» of its accounts. The NPL level is now one third below the peak recorded in 2016, and in 2018, the country’s banking system presented its best results since the crisis. However, regardless of these signs of progress «Portugal still presents very high levels of NPL, one of the highest in the Eurozone», Sušec added.

For the ESM’s director, «enhancing asset quality a very important step if we want to improve the banking system’s resilience and its capacity to finance the economy».

The specialist also noted that the debt pile of the country was still very high, but that the current recovery has allowed for the country to have a larger fiscal buffer, as fiscal revenue increases and debt progressively decreases.

During his speech, the ESM’s representant noted that Portugal has reinforced its status as a country which «successfully overcame the crisis» and that the country’s positive economic performance has opened the door to new financial markets, making it «less vulnerable to shocks».

Original story:Dinheiro Vivo | DV/Lusa
Photo: FreeImages.com / Svilen Milev
Translation & Edition:Prime Yield

Portuguese REITS have come into force

7 February, 2019

Starting February 1^st, a REITs regime has come into force in Portugal.

Known as SIGI – Sociedades de Investimento e Gestão Imobiliária, the Portuguese REITS are regulated by the legislative decree nº19/2019, published in Diario da República on 28^thJanuary.

This legislation sets a minimum share capital of €5 million to create a SIGI, which has to be listed into the stock market. Among all the other requirements which can be found in the diploma, for instance these societies have also a limited indebtedness level correspondent to a maximum of 60% of its total assets value.

Aiming to boost even further the real estate investment activity in Portugal, and particularly the home rental market, the SIGI portfolios must include property assets dedicated rental or to be explored in other ways of long term economic use. Even though the residential market is appointed as its main focus, it is not obligatory as the SIGI may also invest in other asset classes, such as retail, logistics or offices, for instance.

Original Story: Vida Imobiliária | Fernanda Cerqueira
Photo: FreeImages.com/Hugo Humberto Plácido da Silva
Translation and Edition:Prime Yield

Novo Banco puts its focus in NPL and Real Estate sales

7 February, 2019

Focused on cleaning its balance sheets and in the reduction of its NPL stock, Portuguese Novo Banco has advanced with the sale of a NPL portfolio worthing €1 billion and of other €500 million in real estate assets.

According the Jornal de Negócios, which quotes Debtwire, the Portuguese bank led by António Ramalho is already receiving proposals from financial advisores for the placement of the real estate portfolio in the market, which is expected to happen still in this quarter. In the race to advise this sale are well known names such as Alantra, Deloitte and PwC, among other. The sales process is expected to be completed by June.

So, after “Project Nata”, a NPL portfolio with a gross book value of €2.15 billion sold last December to a JV from KKR and LX Partners, the bank is now putting for sale the “Project Nata 2”, other NPL portfolio worthing €1 billion.

Also, in progress is the sale of “Project Viriato 2”, a €500 million real estate portfolio consisting mainly of commercial and industrial assets spread in the Lisbon region, writes the same publication, remembering that the disposal of “Projecto Viriato 1” generated a sales result of €388 million.

Original Story: Idealista | Idealista News
Photo: Novo Banco
Translation and Edition:Prime Yield

Economy indebtedness increased by €1.6bn in November

30 January, 2019

Portugal’s economy indebtedness level worsened in final stage of 2018, increasing by €1.6 billion in November from the previous month, up to over €723 billion.

The worsening of public sector’s debt pile is one of the main reasons behind this upward movement, according to data released by Portugal Central Bank (BdP – Banco de Portugal).

This upward trend has been witnessed for five months now and seems to continue to worsen, with November recording the highest levels of indebtedness since April 2018, when this indicator stood at €724.5 billion.

Original Story: Eco News
Photo: FreeImages.com/Pierre Amerlynck
Translation and Edition: Prime Yield

Demand for credit is on the rise

29 January, 2019

Demand for credit, from corporations to households, has been on the rise over the last year, in a trend expected to continue this trimester, reveals the latest Portuguese Central Bank (BdP) banking system survey.

Even though access criteria for credit was nearly unchanged, by the end of 2018 «some banking institutions have noted that there was a slight increase in terms of demand for credit from small companies and big corporates, especially in terms of long-term loans», states the report. These banks have also admitted that they expect the increasing trend to continue being witnessed.

The BdP also adds that three of the financial institutions surveyed had registered a slight increase in their financing need.

Original story: Eco News
Photo: FreeImages.com/SvilenMilev
Edition: Prime Yield

Portuguese banks are cleaning up balance sheets at a faster pace, says Moody’s

28 January, 2019

According to Moody’s latest report, released on Tuesday 23^rdJanuary, the Portuguese banks are cleaning up their balance sheets at a faster pace, but also warned that the country has a yet a poor performance compared to the European Union average.

Last year, non-performing loans (NPL) in the Portuguese financial system dropped markedly due to sound economic conditions, an increase in loans written off and the removal of assets from balance sheets, explained Moody’s president Pepa Mori.

The rating agency added that the fall accelerated in the fourth quarter, with some major banks selling high volumes of non-performing loans. It is the case of Novo Banco, which is putting for sale another more € 1 billion in NPL.

As of September 30, the Portuguese NPL ratio, which measures the weight of NPL in the total credit granted, stood at 12%, showing a drop of 3.2 p.p. from the 15.2% recorded in December 2017. Since its peak of June 2016 (20.1%), the country’s NPL stock has reduced by 25%.

Even though this positive evolution in cleaning up the balance sheets, Moody’s warns that the Portuguese banks’ NPL ratio is «still very poor when compared to the European Union average», which stood at 3.4% in September.

The rating agency points out that the main problem in the Portuguese banks bad debt relies in the credit granted to companies (22.1% ratio), while the problematic real estate assets continue to represent a constraint on the quality of banks’ assets.

Moody’s analysts expect the Portuguese economy to grow 1.7% this year and said they hoped the NPL stock would fall even further in 2019, since most banks had committed publicly to keep reducing them.

Original Story: Jornal de Negócios | Nuno Carregueiro
Photo: FreeImages.com/Wundelman
Edition and Translation:Prime Yield

Portuguese housing prices up again

25 January, 2019

Housing prices went up once again in Portugal during the third quarter of 2018, growing by almost twice as much on the year earlier, as in the euro area and European Union as a whole, according to the latest figures released by the EU’s statistical bureau, Eurostat.

In Portugal, prices for residential property were up 8.5% in the quarter over the same period of 2017, while in both the euro area and the EU the year-on-year increase was 4.3%.

As against the second quarter, housing prices in the euro area in the third quarter were up 1.6% and in the EU by 1.5%. In Portugal they were up 1.0%.

According to Eurostat, the biggest year-on-year increases in the third quarter were in Slovenia (15.1%), the Netherlands (10.2%) and Ireland (9.1%). Just Sweden (-2.1%) and Italy (-0.8%) saw prices drop.

Original Story: The Portugal News | TPN/LUSA
Photo: FreeImages.com/ Miguel Saavedra
Edition:Prime Yield

Montepio Geral sells a €239 Mn NPL portfólio

25 January, 2019

Portuguese bank Caixa Económica Montepio Geral (CEMG) signed a public deed for the sale of a non-performing loans (NPL) portfolio with a gross amount value of €239 million, in the form of a direct sale, to Mimulus Finance Dac, a company incorporated under the laws of Ireland, established in Dublin.

Signed on 27 December 2018, and following a competitive sale process, this agreement compromises a portfolio that includes approximately 10,000 contracts. In the not sent CMVM, the Portuguese Securities Market Commission, the banks explain that «the completion of this operation materializes Caixa Económica Montepio Geral’s strategy for the continuous reduction of non-performing assets».

Original Story:Jornal de Negócios | Diogo Cavaleiro
Photo: Montepio
Translation and Edition:Prime Yield

Novo Banco closes the sale of €2.1 Bn NPL “Project Nata”

17 January, 2019

Portugal’s Novo Banco, created from the collapse of former Banco Espirito Santo, has successfully offloaded a portfolio of non-performing loans (NPL) worth a total of €2.1Bn. Known as “Project Nata”, the portfolio containing 102,000 contracts has been purchased by the investment funds KKR and Lx Investment Partners.

The process is expected to be completed in the first half of 2019 states the bank in a note to the stock market commission CMVM. “Novo Banco informs that after the completion of a competitive sale process, Novo Banco and Best have signed a purchase and sale contract for Non-Performing Loans (NPL’s) and related assets (Project Nata) to a consortium of funds managed by KKR and LX Investment Partners”.

The sale, originally announced in mid-December, is the largest sale of Non-Performing Loans ever in Portugal.

However, the actual value of the portfolio is greater than the €1.7Bn initially estimated, in other words an additional €400 million.

Taking into account the value published by Novo Banco, the amount of loan defaults on the bank’s books should fall to around €6.3Bn from the €6.7Bn it has been before the sale of this tranche of debt.

In addition to Project “Nata”, the bank led by António Ramalho is now preparing to sell a second credit default portfolio Project ‘Albatros’ in Spain. This is a collection of NPLs with an estimated value of €400 million in an operation that should be completed by the end of the year.

Novo Banco also has sold a portfolio of 9,000 properties to the US fund Anchorage Capital Group for €716 million with the management of the portfolio handed to the servicing group Finsolutia and Hipoges.

Original story: Essential Business
Photo: Novo Banco
Edition: Prime Yield

Investment through Portuguese Golden Visa reaches 838 €Mn in 2018

11 January, 2019

Portugal garnered 838 €Mn in investment through the Golden Visa programme last year, which is 0.6% less than the previous year, according to figures released by the Foreigner and Border Service (SEF).

In 2018 the country issued 1,409 Golden Visas, which is up on the previous year. China leads the list of gold visas granted flowed by Brazil, Turkey, South Africa and Russia.

The Portuguese Golden Visa scheme was originally launched in 2012, targeting wealthy foreigners willing to invest at least €500,000 in Portuguese real estate or to create 10 jobs.

Original Story: The Portugal News| AICEP Portugal Global
Photo: Free Images.com/Ricardo Gurgel
Edition: Prime Yield

Portuguese NPL stock falls 4% in the 3rd quarter 2018

9 January, 2019

In the third quarter of 2018, the Portuguese NPL (Non-Performing Loan) ratio decreased 0.4 p.p. to 11.3%, benefiting from a reduction of non-performing loan stock by 1.3 €Bn (4%), according to the latest report released by the Banco of Portugal (BdP, the Portuguese Central Bank).

The reduction of this ratio was more significant in the household’s segment (housing purpose), whose NPL stock decreased by 269 €Mn (5%) in the quarter ended in September.

According to BdP, the NPL ratio decreased by 6.6 p.p. (SNF: -8.1 p.p., households: -3.2 p.p.) since the historical peak observed in June 2016, reflecting a 38% reduction in total NPL stock (NFC: -37%, households: -36%), corresponding to 19.2 €Bn (SNF: -12.2 €Bn, households: -4.6 €Bn).

Between July and the end of September 2018, the NPL impairment coverage ratio increased by 0.3 compared to the previous quarter, standing at 53.2%. This figure is 10 p.p. above that observed in June 2016, when the NPL ration reached its maximum value.

The Portuguese Central Bank explains that the quarterly variation was mainly due to an increase of 0.8 p.p. in the impairment coverage ratio of the SNF segment, which stood at 58.7%. The coverage ratio of the consumption and other purposes segment decreased by 2.1 p.p., mainly reflecting a reduction of the accumulated impairments for NPL in this segment.

Original Info: Banco de Portugal (BdP)
Photo: Banco de Portugal
Written and Edition: Prime Yield