Caixa Geral de Depósitos (CGD), Montepio and Lx Partners are trying to clear problem assets from their balance sheets.

Anticipating an increase in the NPL ratios among their portfolios, at a time when the risk of default among families has also risen, fuelled by rising interest rates, banks and management companies are looking to clear bad loans from their balance sheets. Caixa Geral de Depósitos (CGD), Montepio and Lx Partners have €4.6 billion up for sale.

CGD has the Pluto portfolio worth €150 million, Banco Montepio has the Côa portfolio worth €233 million and LX Partners has the Cascais portfolio worth €4.2 billion, according to a report in Jornal Económico.

According to the Bank of Portugal (BdP), although the gross NPL ratio remained unchanged at 3.1% in the second quarter (the NPL ratio for individuals also remained at 2.4%), banks increased the ratio of loans in ‘stage 2’ for individuals to 9.5% (compared to 9% in the first quarter).

The increase is most significant for housing loans, where the ratio rose to 9.1%, compared to 8.4% in the first quarter.

The ‘stage 2’ loan ratio refers to loans where banks believe there is a higher risk of losses due to customer default. The stage 2 ratio for consumer and other loans fell to 10.7% in the second quarter from 11.1% in the first quarter.

Original Story: Jornal Económico | Maria Teixeira Alves
Photo: Photo by Svilen Milev on FreeImages
Edition and translation: Prime Yield