Recovery, an Itaú Group company and leader in the purchase and management of non-performing loans in Brazil, released its balance sheet for the first half of this year. According to the company’s survey, the sale of non-performing portfolios totalled R$9.7 billion in the first half of the year, with more than R$4.7 billion in the second quarter alone.

‘Within the NPL market, some segments have been standing out, including credit card debts, debts from digital banks and fintechs, and vehicle financing. It’s worth emphasising that these figures fluctuate over the months and years due to various factors related to the economy. It’s a natural market movement,’ explains Plínio, head of Commercial and Portfolio Acquisition at Recovery.

Looking at the market for the sale of delinquent portfolios, with a focus on credit card debts, this reached R$3.5 billion from January to June this year, R$2 billion of which between April and June alone. ‘Credit card debts are the most representative in the market for the assignment of delinquent portfolios because they reflect the general scenario of Brazilian indebtedness. The ease of contracting this type of credit and the high interest rates drive this indebtedness,’ comments Ribeiro.

The digital banks and fintechs segment, on the other hand, recorded R$1 billion and R$0.5 billion, respectively, in the first half of this year and in the first quarter. ‘These banks are making more and more progress in approving credit and this ends up causing their debt rates to rise as well. The credit assignment market is undoubtedly a way for these new banks to gain liquidity and have a healthier operation. I believe that these banks should increasingly access the assignment market,’ says the expert.

Debts from the vehicle sector totalled R$1.2 billion in the first half of the year and R$0.8 billion in the second quarter alone.

Original Story: BNews | Author: Verônica Macedo
Edition and translation: Prime Yield