Unicaja has completed another sale of non-performing assets. The bank has agreed to transfer a real estate exposure (REO) of around €100 million to GCBE Advanced Solutions, a Cerberus servicer, and the Luxembourg-based SRPO Fund. This is the Ulysses portfolio, which according to market sources consists mainly of residential assets with some commercial property.

The figure represents approximately 9.7% of the total volume of foreclosed assets (REOs) held by the institution on its balance sheet. This exposure stood at €1.030 billion gross at the end of September, down 35.5% from €1.597 billion twelve months earlier.

The Bank’s total exposure to non-performing assets amounted to €2.379 billion, as it includes a further €1.348 billion gross in doubtful loans, the balance of which fell by 22.4% year-on-year in September, contributing to a parallel fall in the NPL ratio from 3.4% to 2.8%.

9.7% of ‘brick’ loans

Unicaja, like most banks, has repeatedly resorted to these divestments in order to improve the quality of its balance sheet and transfer the management of non-performing assets to specialised companies.

Since 2015, it has divested more than €3.6 billion in portfolio sales of all types of problem assets. Between January and September last year alone, it made similar sales worth €267 million and realised €8.5 million in capital gains, thanks to the high provisions on such assets, according to its latest financial report.

Of this year’s sales, 43% were residential properties, 27% were land and 30% were tertiary assets and work in progress. These figures do not include the transaction formalised in December with GCBE and SRPO Fund (Spanish Residential Property Opportunities Fund).

At the beginning of the year, the Bank sold €200 million of property assets in the Minotauro project to the Luxembourg Telesto fund and the French Tikehau Capital fund. With Cerberus, it has completed various operations such as the Centauro project, a portfolio of 100 million in real estate assets agreed in 2023, after transferring a similar portfolio for 200 million to the fund and Deutsche Bank in 2022, or another portfolio of 1,000 million in bricks and NPL acquired by Cerberus with the Davidson Kempner fund in 2019.

Unicaja has accelerated the disposal of toxic assets after a strong provisioning effort, and today its NPL are well below 3.4% of the banking sector as a whole. It has a provisioning buffer that covers 69.8% of the total portfolio of non-performing assets, up from 66.2% in September 2023.

Both investors are consolidating their positions. GCBE Advanced Solutions is emerging as one of the major servicers, with more than €25 billion in assets under management, after completing several transactions last year, including the purchase of Zolva’s Spanish and Portuguese business and the acquisition of Hoist’s NPL macro portfolio, in the latter case together with Intrum.

Original Story: El Economista | Author: Eva Contreras
Edition and translation: Prime Yield

Abanca is removing new non-performing assets from its balance sheet. The bank will transfer around €140 million in two separate operations, including healthy loans that have suffered some incidence in the last year and other financing with defaults. On the one hand, the bank has sold €60 million in refinanced and restructured mortgages (reperforming in the jargon) to the American fund Balbec Capital. In Spain, the transaction is a continuation of the Xallas project, in which it transferred to the same fund a portfolio of similar assets with a total gross nominal value of almost €80 million.

In Portugal, it is also finalising the transfer of a further €78 million of unsecured NPL to Servdebt Capital Asset Management, an Iberian asset management and recovery company. This is the so-called Gaia project or operation.

Some twenty disposals

So far this year, the Bank has also completed the placement of a €60 million portfolio of unsecured NPL to Poland’s Kruk, in the Ezaro portfolio. In recent years it has completed around 20 similar sales to KKR, EOS Spain and the US fund CarVal Investors, among others.

Abanca has been particularly active in the reperforming credit segment, completing five transactions in just four years. This is an asset class that is becoming increasingly important in a market dominated by unsecured NPL, now that banks have moved on from the massive real estate outflow.

The portfolio transferred to Balbec comprises outstanding mortgages with private individuals secured on residential properties throughout Spain. It has been structured for sale by securitisation, with the bank retaining the management of the ‘healthy’ loans and transferring them to a servicer when they become non-performing.

The segregation of non-performing assets and their subsequent sale is part of the routine management of institutions to improve the quality of the balance sheet and to transfer debt collection to specialised companies, thus freeing up their teams from these functions.

In the case of Abanca, the clean-up of the balance sheet has gone hand in hand with the integration of other banks during its acquisition spree. The latest was Eurobic, which was completed last July. But since Banesco entered Spain in 2012 with the purchase of Banco Etcheverría and the acquisition of Novagalicia Banco (now Abanca), the group has added Popular Servicios Financieros, Deutsche Bank’s Portuguese operations, the Spanish operations of Caixa Geral de Depósitos and Novo Banco, Bankoa and Targobank.

At the end of September, its NPL ratio was limited to 2.6%, at 1,312 million, with provisions of 1,024.9 million and 78.1% of impaired assets. If Targobank and Eurobic are excluded, the ratio is even lower at 2.3%.

Its exposure to foreclosed assets is also very limited, at 433.13 million at the end of September, barely 0.2% of the group’s balance sheet and backed by provisions covering 63.3% of the risk.

Original Story: El Economista | Author: Eva Contreras
Edition and translation: Prime Yield

The Bank of Spain has confirmed that non-performing loans (NPLs) fell by €291 million in a single month, bringing the total to €40.163 billion.

The NPL ratio of Spanish banks continued to fall in October to 3.41%, two tenths less than in September and almost two points lower than a year ago, when it stood at 3.60%, the lowest level since the end of 2008. In total, the volume of doubtful loans reached 40.163 billion euros, 291 million euros less than the previous month and a reduction of 2.226 billion compared with October 2023, according to provisional data published by the Bank of Spain.

The main reason for this decline is the renewed fall in NPLs – the aforementioned 291 million – which allowed the NPL ratio to fall despite the credit portfolio falling to 1.177 billion euros, compared with 1.179 billion euros at the end of September. However, the loan book increased by €1 billion year-on-year.

The supervisor also published the aggregate NPLs of banks, savings banks and cooperatives (rural banks) on the one hand and consumer finance companies on the other. The NPL ratio of banks, savings banks and cooperatives fell from 3.32% in September to 3.30% in October, also the lowest rate since December 2008, after the NPL balance fell by 309 million to 37.111 billion euros.

October’s NPL ratio of 3.30% is also lower than the 3.48% of the same month in 2008, after the NPL balance fell by €2.127 billion since then.

Financial institutions saw their NPL ratio rise to 6.68% in October, some 20 basis points higher than in September. Compared with October 2023, however, it fell by 25 basis points. In absolute terms, the volume of doubtful loans of this type of institution stood at EUR 2.880 billion at the end of October, 19 million more than in September. Compared with the same month of the previous year, the doubtful balance was 94 million euro lower.

Original Story: La Razón | Author: Javier de Antonio
Edition and translation: Prime Yield

Alternative asset manager Balbec Capital LP has hired Goldman Sachs Group Inc. to issue its first Spanish securitizations totaling about €800 million by bundling loans it bought in the country over the past few years, according to people with knowledge of the matter.

The US fund has bought up performing loan portfolios from Spanish banks over the last three years and now is seeking to finance them in the bond market, according to the people, who asked not to be named because the process is private. Balbec would seek to repackage the mortgage loans it purchased into securities of varying risk and size, they said. 

Some of the loans Balbec has bought in recent years came from banks such as Banco Sabadell SA and private equity firm Lone Star Funds, the people added, noting not all loans it purchased will make it into the residential mortgage-backed securities. The fund is looking to tap the market twice with a pair of RMBS transactions, each one for about €400 million, some of the people said.

Talks are continuing and details of the deals, including size, may change, people said. Balbec is likely to come to market in 2025, the people said, noting the deals will likely be split between the first and the second quarters.

The transaction comes as Europe’s asset-backed securities market sees renewed interest, with the European Investment Bank preparing to pump in more money once long-awaited reforms take hold. At the same time, the European Commission has sounded out the industry about a range of measures to make it easier for banks to offload loans to third-party investors. 

European Securitization

The market for securitization in Europe has almost halved since its peak of approximately €2 trillion during the 2008-2009 financial crisis, declining to €1.2 trillion at the end of 2023, according to a Commission document. That’s just a fraction of the size of the US market, which hit €13.7 trillion in 2021. 

Balbec has tapped the European market before, having issued an Irish RMBS backed by almost €700 million of non-performing mortgage loans in the country, according to a 2022 S&P Global Ratings report. In the US, the fund has been very active this year, with its latest RMBS transaction pricing in late November. Balbec has issued about 20 residential mortgage deals in 2024, according to data compiled by Bloomberg.

Spanish banks have been busy selling re-performing loans in recent years. These credits are usually included in the so-called Stage 2 European Central Bank classification, which means lenders must keep higher provisions for them. CaixaBank SA is in talks to sell a €500 million portfolio of these kinds of loans to Morgan Stanley and AB Carval Investors LP, Bloomberg reported.

Balbec manages more than $7 billion and has been active in the Spanish and Portuguese markets. Earlier this year, it bought a portfolio worth over €4 billion of soured Portuguese loans from Luxembourg-based LX Partners. And in 2023, Balbec secured roughly $465 million in commitments for its sixth flagship fund, which plans to invest in consumer, residential and commercial loan portfolios.

Original Story: Bloomberg | Author: Jorge Zuloaga and Carmen Arroyo
Edition: Prime Yield

Santander has once again entered into an agreement with the Fortress Investment Group to divest itself of non-performing assets (NPL). The bank has placed around €330 million of unsecured loans and other financing operations with collateral in the so-called Swing project, according to market sources. The bank declined to comment.

This is the second transaction it has closed with Fortress in just a few months. At the beginning of the year it awarded the Churchill portfolio, with a gross nominal value of €200 million, while transferring the Newman portfolio to Balbec Capital, which in turn comprises real estate assets, secured loans and a portfolio of unsecured loans from Santander Consumer Finance.

With the Swing transaction now closed, Santander has disposed of more than €2,500 million of non-performing loans in gross volume in just over a year. The Bank also reorganised its contracts and positions with various servicers.

Original Story: Cinco Dias |Author: Eva Contreras
Edition and translation: Prime Yield

The English courts ruled that the fund will have to pay this amount, plus 48 million in interest, for a transaction in the midst of the toxic ‘brick’ drain after the 2008 crisis.

The giant Cerberus will have to pay more than €400 million to Banco Sabadell for the sale of several portfolios of toxic assets in 2019. The English courts have ordered the US fund to pay €358 million for the operation, in addition to €48 million for interest and the costs of the process, the resolution of which was announced on December 3^rd..

The origin of this process lies in the drainage of toxic brick that Spanish entities carried out after the real estate bubble of 2008. Specifically, in 2018, Sabadell opened a bidding process to sell several portfolios -Challenger, Coliseum and Rex- with a gross value of around €6,414 million.

The properties were awarded and transferred to Cerberus in 2019 in exchange for a consideration of around €3.5 billion, although it was agreed to defer up to 21% of the amount (around €600 million) over time. Some of the properties included in the portfolios were not registered in the property register because they were in the process of repossession or undergoing auction.

The institution chaired by Josep Oliu had a period of three years, until the end of 2022, to resolve this situation, although it was brought forward in the case of the assets grouped in the Coliseum portfolio. Cerberus paid the deferred payment associated with it, between 170 and 180 million, so that the amount still pending payment fell to around €400 million.

Subsequently, Banco Sabadell complied with the registrations in Challenger and Rex on a package of properties valued at 365 million (91.25% of the total) and this is where the conflict began. The fund refused to pay the total of the remainder, claiming that it had not registered all the assets and therefore did not have to pay anything. The entity sued Cerberus in January 2023 in the High Court of Justice in England; the trial took place in early November, and now the judgement has been handed down.

The court decision, which comes in the midst of BBVA’s takeover bid, will have a positive impact for Sabadell in terms of reducing NPLs (non-performing loans), reducing provisions and increasing coverage, which will translate into an improvement in asset quality and the bank’s risk profile, the impact of which will be reflected in the accounts and balance sheet for the fourth quarter of the year.

Original Story: El Mundo | Author: Maria Hernandéz
Edition and translation: Prime Yield

The rate of non-performing loans (NPL) fell slightly in September from 3.44% to 3.43% in the midst of a slowdown in financing costs and brings the balance of NPL to over 40.4 billion.

One of the main achievements of Spanish banks after the rise in interest rates has been to keep the NPL ratio at historically low levels. The favourable evolution of the economy and the resilience of the labour market have contributed to this downward trend, pushing the NPL ratio down to its lowest levels ever. According to the latest data published by the Bank of Spain (BdE), the default rate closed September at 3.43%, slightly lower than the 3.44% recorded the previous month.

It is again close to the 3.42% it reached in June, coinciding with the first cut in the price of money implemented by the European Central Bank (ECB). In year-on-year comparison, the rate contracted by a little more than one tenth of a percentage point from 3.56%, which translates into 1,627 million less doubtful loans, down to 40,454 million. The slowdown in the Euribor has contributed to this trend and gives mortgage holders some respite. It should be recalled that the benchmark index of the mortgage market in Spain closed the ninth month of the year below 3%, something that had not happened since the end of 2022.

The organisation differentiates between the aggregate delinquency of banks, savings banks and cooperatives and that of consumer finance companies. In this regard, the former ended September at 3.32% and fell in the same proportion as the overall figure, although the amount rose slightly by 19 million to 37,420 million. Compared to a year ago, it fell by one tenth of a point. At the same time, in the case of consumer loans, the rate fell by more than two tenths of a point to 2.48%, although the amount of defaults only fell by two million per month.

The vertical rise in the cost of financing more than two years ago alerted the banking sector to a possible upturn in NPL, which in the end has not occurred. The measures promoted by the government to help mortgagors in difficulty have also helped to contain this rate, which peaked last February at 3.62%. This behaviour is recorded in the midst of an upturn in the granting of loans, which has been rising in double digits throughout the year.

In fact, the demand for mortgage loans has just experienced its best September since 2009 with the granting of 4,885 million in financing for housing. In the same month fifteen years ago, loans of this type were granted for a value of 5,235 million. The difference with that time is that the bursting of the housing bubble had already begun to hit the economy and the cost of financing hovered around the barrier of 1%, while at the end of the third quarter it stood at 3.5%, 0.25% higher than it oscillates at the present time.

Looking ahead to the final stretch of the year, the sector expects to remain at these levels in a context marked by the activation of the countercyclical buffer of 0.5% in a scenario of ‘moderate risks’, which will apply from October 2025. Subsequently, and depending on systemic risks remaining at standard levels, the percentage may be increased by another half a percentage point at the end of next year to be applicable twelve months later.

Original Story: La Información Económica | Author: Carmen Muñoz
Edition and translation: Prime Yield

Axactor ASA (Axactor) entered into an accretive €83 million sale of NPL portfolios in Spain. In parallel, the company announces an anticipated negative revaluation of the remaining portfolios for the fourth quarter 2024.

Axactor has entered into a binding agreement to sell NPL portfolios for a total of €83 million, representing a 2% premium over book value. The transaction represents approximately 6% of Axactor’s total NPL portfolio and the proceeds from the transaction will be used to reduce debt. The positive impact on cash metrics, such as cash EBITDA, is significant, supporting covenant compliance for at least the next four quarters.

“We believe this transaction demonstrates Axactor’s commitment to enhancing financial stability while navigating challenging market conditions. This strategic sale not only supports covenant compliance but also provides flexibility to manage our portfolios proactively,” says CEO Johnny Tsolis.

Additionally, as part of the routine quarterly NPL revaluation process, Axactor has booked a net negative NPV of changes in collection forecasts of €12 million so far in the fourth quarter, and October collections ended €3 million below forecasts (corresponding to a collection performance of 90%). Further meaningful negative revaluations are anticipated before quarter-end, and will be published as part of the fourth quarter 2024 report. The revaluations do not have any cash impact, and as such do not impact neither the interest coverage nor the leverage ratio covenants. There is sufficient headroom under the loan-to-value covenants to remain compliant also after the anticipated revaluations.

Together, these actions provide the company with a strengthened covenant position, further reinforcing the balance sheet.

Original Story: Axactor ASA
Edition: Prime Yield

Banco Santander is releasing more unproductive assets from an old acquaintance. The bank has sold unsecured re-performing loans (RPL) to individuals and SMEs to US fund Balbec Capital for a total of around 90 million euros, market sources told elEconomista.es.

The structure of the sale is unique, as the company will continue to service the current loans, along with other mechanisms to avoid any reputational risk with clients and is linked to an agreement that guarantees the fund the future purchase of the loans that may go unpaid.

“Re-performing debt consists of healthy financings that have been restructured or defaulted in the last year and has become an asset that is increasingly important in the portfolio sales market.

Despite the fact that they are current, the fact that they have suffered payment incidents or have been restructured implies a consumption of provisions for the banks, which see an incentive to transfer the risk in the possibility of reducing this burden, although they usually retain their management due to the link with the client. In fact, many transactions are carried out through securitisation, which allows the risk to be deconsolidated while maintaining this link.

Santander relied on Alantra for the operation now being completed, a consultant it has also used this year to carry out the Turf and Frankel projects, and in previous years for the sale of the Model and Titan projects, among others.

Original Story: El Economista | Author: Eva Contreras
Edition and translation: Prime Yield

Sabadell and Cerberus are in court in a dispute valued at 365 million euros.

Sabadell and Cerberus are facing each other in court with a dispute valued at €365 million . The bank claims the U.S. fund for not paying what, in its opinion, it owes for the purchase five years ago of three portfolios of real estate assets residing in Spain, according to the Financial Times.  

The origin of the conflict goes back to the process carried out by Sabadell to “clean up” the toxic assets that accumulated on the balance sheet after the financial crisis. Like the rest of the banks, the entity packaged the damaged exposure and sought to deconsolidate it by selling it to a third party.

The entity thus agreed in 2018 and, after a competitive process,to sell to Cerberus theportfolios ‘Challenger’, ‘Coliseum’ and ‘Rex’, which had properties of all types for a total gross value close to €6,414 million.

The transaction consideration set at around 3,500 million euros and, as usual in these operations, both partners agreed to defer in time up to 21% of the total amount -some 600 million-, according to sources close to the judicial process.

Some of the properties in the portfolio lacked the relevant registration in the Spanish property registry due to issues such as being in the process of repossession or auction under development. And under the agreement, Sabadell must resolve these registrations to regularize the situation of the properties, with a three-year period until the end of the 2022 financial year.

The bank anticipated the works on the properties in the portfolio ‘Coliseum’and Cerberus paid the deferred payment associated with it – about 170-180 million-. The amount outstanding was thus reduced from around €600 million to around €400 million.

The conflict came with the ‘Challenger’ and ‘Rex’ portfolios. Sabadell complied with the records in a package of real estate valued at €365 million that now demands in court, but the American fund refused to support the payment alleging that it had not been satisfiedon the totality of the assets.

Following Cerberus’ refusal, Sabadell sued the fund in January 2023 in the High Court of Justice in England because the fund’s company guarantor of the agreement formalized in Spain is subject to British law.

The trial was held last week and the magistrate in charge of the case advanced his intention to issue a ruling before Christmas, in the second week of December. The ruling could be final because it is very unusual to file appeals in the United Kingdom and is reserved for very narrow issues.

Original Story: El Economista
Edition and translation: Prime Yield

The US bank has set its sights on the credit cards of Bankinter, which has put a portfolio of loans worth €450 million up for sale.

Goldman Sachs has renewed its appetite for Spanish debt portfolios. A year after it completed the sale of all its real estate portfolios in our country, portfolios acquired during the great financial crisis, it has decided to make another move in Spain.

This time it is focusing on Bankinter’s credit cards, a company that has put up for sale a portfolio of loans worth €450 million.

According to Bloomberg, the US company is the favourite to acquire this portfolio, which consists of loans to 50,000 former credit card holders.

The decision by the bank, chaired by María Dolores Dancausa, to sell this portfolio is part of a general move by the sector to control the default rate, which has been a concern following the rise in interest rates.

Bankinter’s NPL ratio stood at 2.2% in the second quarter of this year, slightly above 2.1% in 2023, a ratio that will reach 2.5% for its Spanish business, below the 3.4% estimated by the Bank of Spain for the entire system in our country.

The process initiated by Bankinter is no exception, and several Spanish banks are already trying to get rid of billions of euros in view of the new interest rate scenario.

Original Story: El Confidencial | Author: Cotizalia
Edition and translation: Prime Yield

BBVA has kicked off the sale of a portfolio of 600 million euros in non-performing mortgages, a process that is part of the bank’s interest in improving its capital ratio. The entity chaired by Carlos Torres has hired Alantra to carry out an orderly process of these loans, a transaction that is expected to go to market in the coming days, according to Bloomberg. This is one of the largest portfolios that BBVA has brought to market in recent years and, moreover, comes at a critical time for the bank, which is in the midst of a takeover bid to try to acquire rival Banco Sabadell.

The sale of portfolios of doubtful assets is one of the bank’s formulas for freeing up provisions and, with them, improving its capital ratios. A reasoning that seems to be behind both BBVA’s move and the portfolio that Sabadell has also put on the market.

The Catalan entity has put up for sale the third portfolio of doubtful loans it has launched so far this year, a portfolio comprising 380 million euros in unpaid consumer and SME loans. These are unsecured loans, which are usually sold to opportunistic funds at significant discounts. Between 2023 and 2024, BBVA has also placed three portfolios on the market with a total volume of €1,100 million.

Original Story: El Confidencial
Edition and translation: Prime Yield

DoValue, Hipoges (KKR) and Anticipa-Aliseda (Blackstone), three of the largest servicers in Spain, have major management contracts due for renewal in Spain before the end of 2025.

Specifically, DoValue’s rights to a Santander portfolio (approximately €20 billion) and Hipoges’ (€14 billion) and Anticipa-Aliseda’s (11,400 million) rights to the Sareb portfolio will expire by that date. In total, around 45 billion, according to figures from Atlas Value Management, which EL ESPAÑOL-Invertia has had access to.

It should be recalled that the management of a Cajamar portfolio, in which Haya Real Estate – now Intrum – held a number of rights, was also due to expire this year. Last July, the Almeria-based rural savings bank announced that it would manage all the assets internally and would not renew the contract with Intrum. Intrum had been managing the assets for 10 years and had a total of 7.4 billion in assets at the time of the crisis.

Once this first round of renegotiations is complete, it will be Intrum, currently the largest servicer in Spain in terms of volume, that will have to put on the overalls.

In 2026, their rights to a €4 billion portfolio from CaixaBank, another €3 billion from BBVA – inherited from Haya – and another €2.5 billion from Ibercaja expire. In 2027, they also have another portfolio from CaixaBank, also inherited from the company acquired in 2023, for €9.600 billion.

Source: El Español | Author: Diego G. Camporro
Translation and edition: Prime Yield

Canada Pension Plan Investment Board (CPPIB) has put a portfolio of distressed Spanish loans up for sale, as the fund works to reduce its exposure to the country built up during the financial crisis last decade.

The sale comprises loans with a face value of around €300 million in unsecured, non-performing loans, according to people familiar with the matter. Canada’s largest pension fund obtained the assets bundled along with a larger portfolio and they will likely be sold at a heavy discount to par, still generating returns, the people said, asking not to be identified discussing private details.

The Canadian pension fund previously acquired substantial debt assets, including real estate portfolios, from Spanish banks such as Banco Santander SA. While working down that exposure, the fund’s broader strategy involves nearly doubling the size of its private credit holdings over the next five years.

Earlier this year, CPPIB had explored the sale of a separate portfolio with a face value of around €1 billion although that process is now on hold, according to people familiar with the matter.

CPPIB declined to comment on the potential sale.

Original Story: BNN Bloomberg | Author: Jorge Zuloaga and Paula Sambo
Edition: Prime Yield

The volume of non-performing loans (NPL) held by banks on their balance sheets at the end of May was €42.353 billion, an increase of €212 million compared with April, bringing the ratio to 3.60%, slightly above the 3.59% of the previous month, according to the latest data published by the Bank of Spain.

Compared with May 2023, there was a fall in the volume of NPL of €475 million, with a ratio of 3.59%. The difference between one year and the next is therefore due to the fall in the total balance of credit, which increases the proportion of NPL among all the credit that the bank has.

Specifically, at the end of May, the total credit balance stood at 1,174 billion, a reduction of €430 million compared with April. Compared with May 2023, the volume of bank credit has been reduced by €16.969 billion.

The data broken down by type of institution show that the doubtful assets ratio of deposit institutions as a whole (banks, savings banks and cooperatives) closed May at 3.49%, two basis points higher than in April and the same level as in May 2023.

In May, this type of institution recorded a doubtful assets portfolio of €39.073 billion, €170 million more than in April and €698 million less than in May 2023.

Credit financial institutions saw their NPL ratio rise in May to 6.64%, compared with 6.58% in April.

In absolute terms, the volume of doubtful loans of this type of institution was €2.98 billion at the end of May, 41 million more than in April. Compared with the end of May last year, the doubtful balance has been reduced by €313 million.

According to data from the Bank of Spain, provisions for all credit institutions stood at €29.984 billion in May, a decrease of €51 million compared with April. Compared with a year earlier, provisions fell by €885 million.

Original Story: Bolsamania | Author: Europa Press
Edition and translation: Prime Yield

Cerberus Capital Management LP is one of the frontrunners to buy a Spanish bad loan portfolio worth more than €2 billion from Hoist Finance AB, according to people familiar with the matter.

The process is in final stages and expected to close by late July, according to the people, who cannot be named as discussions are private. Cabot Credit Management Ltd and Kruk SA are also vying to acquire the assets, according to the people. 

Officials for Cerberus, Hois, Kruk and Cabot declined to comment. 

Hoist is a long-term investor in the Spanish credit sector and the country is its third largest market by assets, at around 16%, after Italy and Poland. The Stockholm-listed company recently agreed to buy a €270 million portfolio of non-performing mortgages (NPL) from Banco Santander SA, Bloomberg reported.

The sale being negotiated with Cerberus is part of Hoist’s strategy to regularly sell assets to free up balance sheet for new deals.

Cerberus is also in the process of trying to acquire about €7 billion in European bad loans from Norwegian debt collector Zolva Group. The loans are mostly from Spain and Norway.

Original story: BNN Bloomberg | Author: Jorge Zuloaga
Edition: Prime Yield

Defaults in consumer credit have once again experienced an upturn that puts banks on their guard. There are several portfolios of doubtful loans on the market to reduce the NPL ratio, which has once again exceeded 7% and has reached the highest level in eight years.

This is shown by the latest data from the Bank of Spain on doubtful loans in financial credit establishments (EFC), which go up to April. These institutions specialise in consumer credit. Although not all consumer credit is in this niche – some banks channel it without CFCs – it is the best approximation for assessing the trend and health of the segment.

Since the covid crisis, the delinquency rate of SCIs has been on an upward trend, although it is gradually experiencing a significant decline, which can be explained by the sale of doubtful portfolios by these institutions to opportunistic funds that buy unpaid loans at a discount. In this case, the discount applied can exceed 90%.

The latest statistics point to a new increase in non-performing consumer loans, up to €3,060 million, compared with €2,852 million in the same month of the previous year. There has been a year-on-year increase of 7.3%, and the NPL ratio has risen to 7.18%, the highest level since May 2016.

On several occasions over the past four years, NPLs have touched 7%, but have always been reduced afterwards by the loan drain. On this occasion, the increase in NPLs can be explained both by the rise in NPLs and by the fall in the total volume of outstanding credit of SCIs, which acts as the denominator, and which fell by €1,111 million between March and April, to €42,638 million.

The Bank of Spain has observed this further deterioration in consumer credit quality, although it is not alarming. As the deputy governor and acting governor, Margarita Delgado, pointed out at the APIE forum in Santander, there has been an 8% increase in loans under special surveillance in consumer lending.

 Consumer credit is always the first warning sign of a possible worsening of the stock of loans on banks’ balance sheets, as households always default sooner, in case of need, on a contract of this type than on a mortgage. These are loans with higher rates and without collateral.

In the banking balance sheet as a whole, the overall NPL ratio remains contained, and in April stood at 3.6%, with a volume of non-performing loans of €42,141 million, compared with a total outstanding stock of €1.17 trillion.

Original Story: El Confidencial | Author: Óscar Giménez
Edition and Translation: Prime Yield