Caixa Geral de Depósitos (CGD), the Portuguese public Bank led by Paulo Macedo has completed the sale of a €825 million  NPL portfolio, an operation that pushed the bank’s NPL ratio to below 10%.

During the presentation of 3^rdquarter results, CGD highlighted “the improvement in asset quality, with NPL ratio reducing to 9.6%” (considering already the disposal of a portfolio concluded in October 2018)”. Excluding this operation, the NPL ratio of the Bank stood at 10.5% at the end of the period analysed.

“We are currently commited in continuing a sustained reduction of this ratio in order to align with the European average by 2020”, stated the board director José Brito during the press conference.

As to the amount of NPL, the State Bank has presented a reduction of about €1,300 million, given the “positive evolution of sales, write-offs and debt recovery”, according to CGD’s quarterly accounts.

In what concerns the discount applied to the portfolio, Paulo Macedo only said that “it was a figure slightly better that the ones the market has been transacting”. The manager also highlighted that this operation has attracted several entities, but did not disclose who was the final buyer.

Paulo Macedo said also that the Bank aims to achieve a NPL ratio below 7% and that it is continuing to sell NPL portfolios, also disclosing  that a new sale of a €250 million NPL portfolio in the household segment should be completed before the year ends.

Original Story: Jornal de Negócios | Rita Atalaia
Photo: Caixa Geral de Depósitos
Translation and Editon: Prime Yield

BPI’s CEO, Pablo Forero, stated that the Bank is preparing the sale of a Non-Performing Loans (NPL) portfolio worth €200 million involving unsecured credit to companies.

“We are currently on a process to sell an NPL portfolio of €200 million”, the manager said during the press conference held to present the results of the Bank in January-September 2018. “It’s a portfolio of unsecured credit to companies”, Pablo Forero added. Between January and September 2018, BPI has recorded a consolidated profit of €529,1 million, a value that compares to the €22,6 million recorded year before.

The CEO of BPI also reported that this year the Bank has already sold 300 properties worth €26 million, corresponding to a gain of about €2,8 million.

During this period, credit to companies has increased 12% to €7,887 million.

As for the credit for house acquisition record a 1.3% growth over the period to €11,233 million.

Original Story: Lusa in Diário de Notícias
Photo: BPI Bank
Translation and edition: Prime Yield

Chinese are leading the way among non-European new residents in Portugal, whose investments have helped fuel a property boom under an advantageous “golden visa” scheme that is also creating political tension at home.

Interior ministry figures issued on 26^thSeptember showed that the 6,498 non-Europeans granted residency since Portugal launched the scheme in 2012 had generated 3.97 billion euros ($4.7 billion) in investments, mainly in property.

The Chinese represented the biggest group with 3,936 residencies granted, followed by Brazilians with 581 and South Africans 259. Turks accounted for 236 and Russians 227.

The program has brought criticism from the far left Communists and Left Bloc, two small parties which support the ruling minority Socialist government.

But there has been no indication the government intends to end a lucrative scheme which has generated a steady flow of investment particularly into real estate.

Portugal’s scheme gives access to residency through a property investment of at least 500,000 euros, allowing visa-free travel through Europe’s Schengen area.

Original Story: Reuters |Axel Bugge
Photo: FreeImages.com/Ricardo Gurgel
Edition: Prime Yield

Housing sales revenues in Portugal reached € 11.6 billion in the first half of the year, 30.5% more than in the same period of 2017. Totalling 86.335, the number of dwellings sold from January until June was 19.8% higher than the one recorded in the same period of 2017, resulting in a daily sales average of 474 houses in 2018.

These data, just released by APEMIP (The Portuguese Association of Housing Brokerage), show that more and more previously owned homes are being sold in Portugal, «with existing housing sales values exceeding € 9 billion, increasing 33,4% facing the same period of 2017».

According to APEMIP, in the second quarter of 2018 alone, were sold 45,619 family houses, the best value recorded ever and translating a quarterly increase of 12%.

Original Story: Expresso | Vítor Andrade
Photo: Freeimages.com/MiguelSaavedra
Translation and Edition: Prime Yield

Housing prices in Portugal increased 11.2% in the second quarter of 2018 compared to the same period of 2017, according to the House Price Index (HPI) from the Portuguese Office of Statistics (INE).

Being 1.0 percentage point (p.p.) less than the recorded in the previous quarter, this result ended a period of five consecutive quarters in which the HPI recorded growing annual rates of change.

Price increases were more pronounced in the case of existing dwellings, with this residential property category showing a 12.6% increase, twice the one observed for new dwellings (6.3%).

Compared to the previous quarter, the HPI grew 2.3% (3.7% in the first quarter of 2018). The increase in prices was mainly due to existing dwellings, which recorded a rate of change of 2.9%, while new dwellings depicted a slight increase of 0.1%. A total of 45,619 dwellings were sold between April and June 2018, which represents an increase of 23.7% over the same period of the previous year. The value of sales was approximately 6.2 billion euros, 34.9% more than in the second quarter of 2017.

Original Story: INE
Photo: BigStock
Edition: Prime Yield

The Portuguese government will present a law proposal by the end of the year for the creation of Real Estate Investment Trusts  (REITS). The announcement to the market was made by the Deputy Minister, Pedro Siza Vieira at the first day of the Portugal Real Estate Summit, which took place in September 18^thand 19^th.

It is recalled that the Portuguese real estate sector has been lobbying for over 10 years for the introduction of real estate investment trusts which are commonplace in neighbouring Spain. The objective of the move is to bolster property product supply for the long-term rental market.

«These are trust companies that will be listed and designed to attract savings which can then be invested in properties for long-term rental»said the minister at the summit held at the Palácio Hotel in Estoril.

These trusts will only be able to hold properties which must be held in portfolio long term and must be earmarked for rental. «This doesn’t currently exist in Portugal», explained Pedro Siza Vieira. New to Portugal, these investment vehicles have been used in Spain for some time where they are referred to as SOCIMI.

In order for REITs to be applied in Portugal a tax and regulatory regime must be put in place which the Portuguese government intends to do by the end of 2018.

Original Story: Iberian Property \ Ana Tavares | 19/09/2018
Photo: Iberian Property
Edition: Prime-Yield

The 2017 Nobel Prize winner for Economics, Richard Thaler warned that Portugal’s real estate market was “heated”.

Speaking at the Vertex conference, which took place on September 18^thin Porto, the co-author of the book “Nudge” which influenced President Barrack Obama, said it wasn’t yet clear if the next crisis would emerge from the real estate or financial sectors but warned that the real estate market in Portugal was “hot.”

«I think those who are paying little to get into Portugal’s market by buying property is running too many risks» he warned.

«I am an optimist by nature, which is why I am not going to predict that a catastrophe is knocking at the door, but it certainly could happen» he told journalists at the event.

Original Story:Essential Business
Photo: Time online
Edition: Prime-Yield

Portugal’s housing prices should soar 9.5% this year, forecasts the rating agency Standard & Poor’s in its latest report about Europe’s residential market.

«Strong domestic and foreign demand, as well as tight supply, are underpinning strong house prices increases in Portugal», explains the report, highlighting the effects of such programs as the Golden Visa or the Non-Habitual Resident.

«We expect prices to rise 9.5% this year, but we forecast price pressures will gradually ease amid slower growth, the rising cost of borrowing, and deteriorating affordability», says the report.

Thus, according to this projections, prices should grow by 7% in the next year, 6% in 2020 and 5% in 2021. Over the first quarter of the year, the annual house price growth accelerated to 12.2%, from 10.5% in 2017. In Lisbon, the average value per square meter rose by 20% to €2,581. In Porto, this value was up 23%, reaching €1,379. Nevertheless, S&P stresses «that the market overall remains affordable, with the price-to-income ratio still 7% below its long-term average».

Original Story: Vida Imobiliária | Ana Tavares
Photo: Freeimages.com/MiguelSaavedra
Edition & Translation: Prime Yield

Keeping its goal to reduce the weight of the defaulted credit in its balance, Novo Banco will carry out the sale of the largest Non-Performing Loans (NPL) portfolio ever in Portugal, according to Debtwire.
Valued at € 1.75 billion, the portfolio will be sold in two separate tranches. The smallest one comprises € 550 million of NPL granted to 54 companies, while the other is valued at € 1.2 billion, covering 62.000 companies and retail clients.
The bank led by António Ramalho has already begun sounding out the interest of potential investors, and the non-bidding offers are expected to be start coming in October, according to Debtwire. Alantra, KPMG and Morgan Stanley are the advisors of the Portuguese Bank.
Last June, the Novo Banco NPL ratio was 28.7%, a significant high figure but that is below the 32.1% recorded in June 2017.

Original Story: Dinheiro Vivo|Rui Barroso
Photo: Novo Banco
Translation and Edition: Prime Yield

According to the latest data released by the European Central Bank (ECB), by the end of the first quarter of 2018 the Non-Performing Loan (NPL) ratio within the Eurozone reached 4.64%, below the 4.83% recorded in December and the 6.23% from March 2017.
In March, the bad credit represented 12.41% of the total loans granted by the Portuguese banks. Even though reflecting a decrease compared to its 16.12% from March 2017 and the 12.96% recorded in December, the Portuguese NPL ratio still almost triples the Eurozone 4.64% average, informs the ECB.

Original Story: Agência Lusa in Observador
Photo: European  Central Bank
Translation and Edition: Prime Yield

At a European level, there is a debate ongoing within the European Banking Authority (EBA) about penalizing the banks with a NPL ratio above 5% which already led to opposition from the Portuguese Banking Association (PBA).
Last june, the association representing the Banks operating in Portugal stated that «there is no economic foundation» to distinguish banks with a NPL ratio bellow or above 5% from the total credit granted, arguing that «there is any study that determines that is from this level of NPL that there will be an impact on financial stability to finance the economy».
The PBA even queries the choose of the NPL as a «distinguishing factor», considering the need to «take into account other risk-mitigating factors» such as the default credit coverage levels and the collaterals values what, states the association, are of «particular importance» for the Portuguese banks.
“Besides, the option for the ratio penalizes those banks that have been making a deleveraging effort, such is the case of the Portuguese banking sector. The NPL amount reduction isn´t adequately reflected by the ratio when it occurs in a context of total credit reduction” said the entity led by Faria de Oliveira.
PBA also called for measures to be taken by the EBA to take into account the differences among the banking systems of each European Union country, whether or not there is a market that allows the sale of default credit portfolios.
Moreover, warned, the imposition of an accelerated reduction of bad debt would lead to the “sale of such assets to prices below their economic value», which would mean the destruction of capital and the transferring of that value to foreign investors”.

Original Story: Agência Lusa in Observador
Photo: FreeImages.com/Svilen Milev
Translation and Edition: Prime Yield

The Portuguese Banks have eliminated about one-fifth of bad debts from their balance sheets during 2017, reducing total Non-Performing Loans (NPLs) to €37 billion (bn), stated Banco de Portugal (the Portuguese Central Bank) in its latest Financial Stability Report (FSR), released earlier this month. According to the institution, it is a “very significant” reduction of this burden that penalizes the profitability of banks and is one of the most – if not the most – important risks to the stability of the financial system. Therefore, Banco de Portugal stresses that efforts for reduction must continue, taking advantage of the more favourable conditions generated by lower interest rates and booming foreign investment in Portugal.

Besides releasing the value of the NPL stock in Portugal – €37 bn as for the end of 2017 – Banco de Portugal also explains how the €9,3 bn reduction has been done. One of the main reasons was the volume of loan writte-offs (meaning, the use of capital to recognize losses), mainly possible due to the capital reinforcement in banks such as Caixa Geral de Depósitos, Millennium bcp or Montepio. Also strongly impacting was the sale of NPLs portfolios to other investors. In addition, national banks also managed to recover some values previously assumed as risk loans, but that were recovered – that being the case mainly in household segment.

Reflecting these effects, Portuguese banks have reduced NPL ratio to 13.3%, a level significantly lower than the 17.2% recorded by the end of 2016. “It’s essential that Portuguese banks continue to follow the plans for reducing NPLs that were submitted to the regulatory authorities. This will put them in a more favourable position when accessing the international financial markets”, highlights Banco de Portugal in this document.

Original Story: Observador (Edgar Caetano)
Photograph: Tiago Petinga/LUSA
Translation and Edition: Prime Yield

Bain Capital and other three funds are the leading candidates for acquiring two NPLs portfolios from Caixa Geral de Depósitos (CGD), according to economic newspaper Jornal Económico. The sale of this type of portfolios, which total about €1 billion, is a part of the public bank’s efforts to “clean” bad debt from its balance sheet. As ECO previously revealed, CGD is planning to sell two NPLs portfolios this year, aiming to continue reducing the “burden” that is still affecting the bank’s profitability. This information was revealed to investors and analysts during the bank’s conference call for the announcement of its 1st quarter results. According to the bank headed by Paulo Macedo, the sale processes are now in a very advanced stage, although no value was advanced for the disposals. José Brito, Member of the Board at CGD, stated that the two sales are not to be close at the same time.

Original Story: ECO
Photograph: CGD
Translation and Edition: Prime Yield

Apollo Global Management is currently negotiating with insurance company Fidelidade a portfolio of 277 properties that the company placed up for sale. The asset manager has been selected to preferential negotiation in the process, after the analyses of three proposals that made it to the final stage of the negotiation process. The other two competitors were Oaktree Capital and Orion Capital.

A source of Fidelidade has only confirmed to newspaper Jornal Económico that an entity has been selected for preferential negotiation, but stated that “confidentiality issues made it impossible to identify the selected entities”.

The interested parts had until 17th November to make a preliminary assessment and submit their non-binding purchase bids. After this phase of the process, three competitors were chosen for the preferential negotiation.

Original Story: Jornal Económico (Ricardo Santos Ferreira e Maria Teixeira Alves)
Translation and Edition: Prime Yield

The International Monetary Fund (IMF) praises the recovery of the banking system in Portugal. And this is due to the national institutions’ efforts in significantly reducing bad debt, which has fallen by over €13 billion(bn) from its peak in mid-2016. For the entity headed by Christine Lagarde, the pace of “cleaning” distressed assets will allow financial institutions to meet or even exceed their reduction goals. Nevertheless, IMF’s leader warns about the necessity of keeping up these efforts in order to return to profitability.

“Capital ratios have increased, at the same time that NPL stock has fallen more than €13 billion in face of the peak achieved in mid 2016”, notes IMF in the report about Article IV Mission, released on May. This pace, states the international entity, “is consistent with meeting or exceeding the bank’s NPL reduction objectives”.

Nevertheless, IMF stresses that banks need to go further on these efforts. “While these are encouraging results, additional progress is needed to strengthen bank’s profitability. This will help them absorb additional costs that might arise from MREL and also to provide support to economy”, says the release.

In addition, bank’s supervisors “should continue to encourage Banks to strengthen further their corporate governance and risk management, while persevering in their NPL- reduction and cost-cutting strategies to generate internal capital”.

Original Story: Eco (Rita Atalaia)
Photograph: Kristi Blokhin/Shutterstock
Translation and Edition: Prime Yield

Portuguese banks have accelerated the pace in cleaning up Non-Performing Loans (NPLs) from their balance sheet in the 4th quarter 2017, when this indicator recorded the highest quarterly decrease ever. For total 2017, NPLs were reduced by € 9,3 billion.

“The stock of NPLs continued to decline in the fourth quarter of 2017. This decrease, of € 2,9 billion, is the largest quarterly reduction since the beginning of the publication of the European Banking Authority (EBA) series (in December 2015)”, notes the Statistical Bulletin of Banco de Portugal (Portugal Central Bank).

“The NPL’ stock reduced by € 9,3 billion compared to December 2016 and by €13,5 billion regarding the highest volume recorded in June 2016”, adds the document. Although the positive input from all sectors, the Portuguese Central Banks highlight the companies segment performance, recording a € 5,9 billion-decrease compared to December 2016.

“Thus, the NPLs ratio decreased 1.3 percentage points (p.p.) in the quarter, to 13.3%, which represents a 3.9 p.p. reduction with respect to the end of 2016 and of 4.6 p.p. compared to June 2016. As for the non-financial private sector, NPls ratio decreased 0.6 p.p. compared to September 2017”.

While the NPLs ratio falls, the coverage ratio for NPLs is increasing. “By December 2017, the coverage ratio of NPL for liabilities was 49.3%, increasing 2.8 p.p. compared to the previous quarter”. “The evolution was dued to an increase of 3.4 p.p. of the coverage ratio within the non-financial companies segment, states the Central Bank.

Original Story: ECO (Paulo Moutinho)
Photograph: Depositphotos
Translation and Edition: Prime Yield

The market of mergers & acquisitions (M&A) lost momentum in Portugal during the 1st quarter of 2018, with y-o-y decreases of 19.1% and 43.3% in the number of transactions and in the negotiated amount, respectively.

According to the latest report from Transactional Track Record, released on April 4th, 3,1 billion euros were transacted in the M&A market during the first quarter of the year, reflecting a 43.3% y-o-y drop. There was also an 19.1% y-o-y downward in the number of transactions, which totalled 72 in Q1 2018 (89 in Q1 2017).

As the upward trend in real estate continued, the sector was the most active within this period with 15 transactions recorded, but, nevertheless, also representing an y-o-y 32% drop. Technology and internet were the areas that grew the most (133%), totalling 12 operations.

In the period under analysis, 31 inbound deals were recorded. Spain continued to be most active foreign buyer in number of deals, closing 10 operations for a total amount of € 156 million – 4 of which in the real estate sector, including the € 86 million investment from ORES Socimi into the acquisition of six retail assets in Portugal. France was also among the most active foreign buyers, with 7 transactions and investments amounting € 305 million, followed by Netherlands, with 2 deals that sum up € 450 million.

Looking into the total amount invested within the first three months, the top is headed by China with more than € 1.5 billion employed in the acquisition of Portuguese companies. «The deal of the quarter named by Transactional Track Record was the acquisition of Forum Montijo, Forum Sintra and Sintra Retail Park shopping centres by Immochan, in € 450 million investment», states the report.

Original Story: Jornal de Negócios
Photograph: Forum Montijo
Translation and Edition: Prime Yield

Caixa Geral de Depósitos (CGD), BCP and Novo Banco, the three Portuguese banks that signed the memorandum to access the non-performing loans (NPLs) management platform, have already finished the list of processes to be transferred into this vehicle. The total of bad credit which will be jointly managed amounts to €1 billion.

The original story was released by economic newspaper “Jornal Económico”, wich quotes a source close to the process. According to the newspaper, the €1 bn are distributed almost «equally» between the three adherent banks.

This list comes a month after the banks had begun contacting their clients so that their non-performing loans can be jointly managed by the NPL management platform.

The memorandum to access the non-performing loans platform (“Plataforma de Gestão de Créditos Bancários”) was signed last September by CGD, BCP and Novo Banco. It aims to solve non-performing loans from these banks portfolio and shrink to a third the average period of recovery of these credits( to six months). But the platform works are, however, delayed. In September there was the expectation that by the end of the 1st quarter of 2018 the first results should be starting to be seen, but only now, after the conclusion of the credit lists to be manged by the platform, is that the work will start.

Original Story: Eco
Photograph: Depositphotos
Translation and Edition: Prime Yield

Bankinter Portugal real estate portfolio from non-performing loans (NPL) disclosure is made of 400 properties. Most of the assets are residential, having a value of 40 million euro, or 10% of the consolidated value.

The bank informed that its portfolio of mortgaged real estate assets had a “significant decrease” in the final stage of 2017, to a total gross value of 411,6 million euro (111,9 million less than one year ago), of which 44% correspond to residential assets. The foreclosure coverage is now 45,2%.

The NPL ratio of the Bank in Portugal is 7.5%, decreasing 1 percentage point compared to 2016. Now this indicator figures 392 million euros.

Original Story: Idealista
Photograph: Bankinter
Translation and Edition: Prime Yield