NPL&REO News

Greek NPLs at the focus of international investors

12 April, 2019

Greece is now firmly at the focus of international entities investing in nonperforming loans, despite the uncertainties within those funds on the future returns of such investments and their reservations about the country’s administrative environment.

According to a survey conducted by London-based multinational law firm Ashurst, almost half of the investors (46%) said it is possible they will invest in NPLs in Greece in the next couple of years. The country ranks second in investor preferences, behind Italy, in which 51% of survey respondents said they intend to invest.

Greece is also second in the share of investors who have already invested in Greece in the last two years – 39% against Italy’s 43%.

«Given that the Greek market remains at its formative stages, it’s notable that some 39% of investors report that they already invested in Greece. Appetite there remains high with almost half of investors stating that they are likely or more to invest there in the next two years. With 2018 seeing the first two major secured NPL transactions in Greece successfully conclude, the Greek legal and regulatory environment appears to be entering the new world of NPLs with a renewed sense of commitment», Ashurst partner Olga Galazoula.

The responsible also noted that «Greece’s economy remains susceptible to wider market shocks. The first half of 2019 will prove pivotal in assessing Greece’s prospects as a sustainable NPL market, with the country in pre-election mode. It also remains to be seen if the recently renewed calls for the establishment of an asset management company to deal with the systemic NPL issue bear fruit this time round».

Original Story: Ekathimerini | Eirini Chrysolora
Photo: FreeImages.com/ JonteRemos
Edition: Prime Yield

Write-offs are the main tool for the cleaning up of Portuguese banks’ balance sheets

12 April, 2019

The Portuguese banking system’s non-performing loan (NPL) ratio continued to decline, to 11.7% as of Q2 2018 (and 11.3% as of Q3 2018), after peaking at 17.9% as of Q2 2016. This 6.2 percentage points contraction in the NPL ratio is mainly due to a nearly 40% reduction in non-performing loans outstanding amount, compared to a 2.1% decline in total loans outstanding amount.

According to the Bank of Portugal’s data, 42% of the decline in the NPL ratio is due to write-offs. Sales and securitisations accounted for 23% of the ratio’s decline. Nearly two thirds of the cleaning up of Portuguese bank balance sheets occurred via the removal of non-performing loans from the banking system.

Moreover, the reclassification of NPL as “performing loans” more than offset the flow of loans that turn non-performing. The net flow of non-performing loans contributed to a 24% reduction in the NPL ratio.

Breakdown of the decline in the NPL ratio in Portugal between Q2 2016 and Q2 2018

Original Story: FXStreet
Photo: Banco de Portugal
Edition: Prime Yield

Greece’s lenders want home protection criteria shift

26 March, 2019

Greece’s creditors are insisting on a drastic reduction of the maximum property and income criteria for the protection of borrowers’ homes, or the exemption of corporate debts, before approving the Greek plan, sources have told Kathimerini.

The lenders are asking that the ceiling on bank deposits a debtor may have to be eligible for primary residence protection be dropped to €5,000, from the limit of €65,000 that the original draft agreement provided for. Similarly they want to see the property value limit reduced to €100,000 from the original €260,000.

The creditors’ demands were the main reason for the disagreement at Monday’s Eurogroup that led to the postponement of the disbursement of almost €1 billion to Athens, and to Finance Minister Euclid Tskalotos asking for more time so that the decisions can be made at the government level.

The objective of the creditors is to see the number of borrowers that qualify for the new protection system shrink further, as they consider the figure of 180,000 debtors that would be protected under Athens’s proposal and bank estimates to be particularly high. In the creditors’ view, the government will not only protect the financially weak but also some strategic defaulters, thereby strengthening the culture against repayment.

In Brussels and Frankfurt they believe you cannot have someone with € 30,000 in the bank – let alone €65,000 euros – claiming to be unable to pay a monthly tranche of €200 or €300 to spare his or her primary residence from foreclosure. That is why they are seeking a drop in the limit of bank deposits to €5,000, while the government has only consented to halving the limit of the original proposal – i.e. bringing it down to around € 32,500.

Original Story:Ekathimerini-com | Evgenia Tzorti
Photo: FreeImages.Com/Pierre Amerlynck
Edition:Prime Yield

NPL: EU approves new rules for standard minimum coverage

25 March, 2019

The European Parliament has adopted, on Thursday, new EU rules for standard minimum coverage of bad loans.

Measures to mitigate the risk of possible, future, non-performing loans (NPLs) accumulating due to the recessions brought about by the 2008 financial crisis were approved by the Parliament, with 426 votes to 151 and 22 abstentions.

In an official statement, the EU explains these measures «will help strengthen the Banking Union, preserve financial stability as well as banks’ profitability and encourage lending, which create jobs and growth across Europe».

NPLs are loans that are either more than 90 days overdue or are unlikely to be fully repaid. To complement the existing rules relating to own-funds, Parliament voted to introduce common minimum loss coverage levels.

So, adds the same source, «each bank will have to set an amount of money aside, to cover losses caused by future loans that could become non-performing. Coverage requirements for banks will, however, vary, depending on whether NPLs are secured by eligible credit protection i.e. collateral or unsecured. The kind of collateral being used, such as real estate, will be also taken into account».

The new rules, which have already been informally agreed with Council, will only apply to NPLs taken out after the entry into force of the Regulation.

Original Story:European Sting | European Union
Photo: FreeImages.com/Sarah Cuypers
Edition:Prime Yield

Cerberus wants to take €350 million with Gescobro sale

22 March, 2019

Cerberus Capital Management has just put the sales signal over Gescobro, its credit recovery company in Spain. According to several sources listened by La Información, the North-American fund is completing the five-year disposal programme established when it acquired the credit recovery society from the Spanish fund Miura, back in 2014.

The same media added that Ceberus aim is to obtain around €350 million with the deal, although the final price will depend on how the sales process will go on. Alantra is advising Cerberus on the sales process, which is expected to last until the end of first semester, at least. The non-bidding offers phase is now open.

The sales value is based on the significant portfolio of bad credit acquired by the company over the last few years from the main Spanish financial entities, and whose gross asset value totals more than €8.6 billion. More precisely, Gescobro owns 12 unsecured credit portfolios with a gross book value of €8.3 billion and other two secured credit portfolio with a gross nominal value around €300 million.

Estimated recovery procedures pending amount to almost €600 million over the next 15 years.

Besides, Gescobro has “servicing” agreements with the majority of the main Spanish banks, being responsible to manage and recovery their non performing credits. In total, these business area means other €3.5 billion third party owned under management. Among these last ones, there is the recently acquired «Mauser Project».

Established in 1980, Gescobro is specialist in non-secured credit from SMEs.

Original Story: La información | Pepe Bravo
Photo: Cerberus online
Edition:Prime Yield

Intrum plans to reinforce investment in Greece’s NPL market

19 March, 2019

«A step toward the right direction to reduce the moral hazard in the country,» is how Intrum Justitia Group Chief Executive Mikael Ericson describes the agreement between the Greek government and the country’s banks concerning the amendment of the so-called Katseli law for the protection of debtors.

In an interview with Kathimerini, the head of one of the largest European nonperforming loan servicing companies says that the group’s plan in Greece is to be independent and to benefit both the lenders and borrowers, as the former will be getting paid for products and services they have sold, and the latter will recieve assistance to improve the state of their finances.

The responsible also revealed Intrum’s plans to reinforce its presence within the Greek market, after having acquired two large NPL portfolios. «We are considering a variety of options and more recently we have applied for a debt servicing license with the Bank of Greece», he said. Besides, «we are also looking at other alternatives, one potentially being to buy a licensed debt servicing platform, another to do a carve-out from a local bank, or even to build a platform of our own».

Original Story: Ekathimerini | Evgenia Tzortzi
Photo: Intrum
Edition:Prime Yield

Bain Capital raises €1.25 billion fund to purchase European Bank Loans

18 March, 2019

Bain Capital’s credit arm raised 1.25 billion euros for a new fund to purchase European bank loans, according to information given to Bloomberg by a person familiar with the matter.

Bain Capital Credit’s new Special Situations Europe fund will target banks’ secured debt, non-performing loan portfolios and real estate assets, said the person, who asked not to be named because the information isn’t public. The money raised for the fund, the first dedicated to European soured loans at Bain, exceeded an initial target of €1 billion, the person said.

Bloomberg contacted an external spokeswoman for Bain, who declined to comment on the matter.

Last year alone, Bain acquired nine bank loan portfolios across Europe, in Greece, Italy, Portugal and Spain, with a gross book value of more than €4 billion, revealed the same source. Bain Capital has $105 billion in asset under management, according to its website.

European lenders’ efforts to clean up their balance sheets since the global financial crisis have created a burgeoning market for trading non-performing loan exposures.

While more than a third below their peak, Italian lenders still had €222 euros of NPL on their books as of June, according to PricewaterhouseCoopers data. Greek lenders are also seeking to slash €89 billion of bad debt from their books, equivalent to about half of the country’s annual economic output.

Original Story:Bloomberg | Luca Casiraghi
Photo: Bain Capital
Edition:Prime Yield

Growing number of hedge funds are moving into shipping debt

18 March, 2019

There is a growing number of hedge funds moving into shipping debt, an asset class few have invested in before, looking to buy up loans and bonds as banks cut their exposure to the troubled sector, Reuters says.

World economy worries and cost pressures are dampening prospects for a proper recovery in many segments of the shipping sector that, as Reuters highlighted, has struggled with tough markets for a decade.

Meanwhile, European banks, particularly German lenders, are trying to offload distressed and performing loans to the industry which attracts high capital requirements.

And the European Central Bank’s banking supervisor has flagged troubled non-performing loans (NPL) in 2019 as «a concern for a significant number of euro area institutions».

Hedge funds clocked up hundreds of millions of dollars in losses from investments in mainly equities when the shipping industry first turned sour a decade ago – and have made limited forays for the most part since.

Last year some equity-focused funds bet on a recovery for the global shipping industry through the stock and futures markets, but many are now retrenching after heavy losses in the fourth quarter.

Debt-focused funds are hoping for more luck.

Hedge funds looking at distressed loans include York Capital Management and Cross Ocean Partners, the sources consulted by Reuters said.

One deal expected to generate hedge fund interest include a portfolio of distressed shipping loans that Greece’s Piraeus Bank is seeking to sell, finance sources said.

A source close to the Piraeus Bank deal said Reuters the portfolio of shipping loans, called Nemo, was made up of non-performing and performing loans with a nominal value of 500 million to 600 million euros. The source said a sale was expected to close in the second quarter of 2019, declining to provide any details on potential bidders.

Original Story: Reuters | Jonathan Saul, Maya Keidan
Photo: FreeImages.com/Magda S
Edition:Prime Yield

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

Bankia hires KPMG to sell 3 NPL and REO portfolios worth €1 billion

6 March, 2019

Bankia is on track to meet one year in advance the goal of freeing itself from the real estate heavy burden that is still in its balance sheets, by hiring KPMG to sell 3 portfolios involving nonperforming loans (NPL) and real estate owned (REO) assets worth €1 billion. The goal is to complete the sales in the mid-year.

The Spanish bank nationalized in 2012 set the goal to clean from its sheets almost €9 billion in nonperforming assets related to real estate between 2018-2020. Along 2018 alone Bankia sold bad assets worth €6 billion. And this year goes in the right direction to achieve its aim a year before the scheduled.

In a more advanced sales stage, one of the portfolios that are now in the market includes developer’s NPL with a gross book value of €500 milion. The second portfolio to be put for sale involves unsecured NPL worth €200 million. According to El Confidencial, a third portfolio is likely to enter in the market soon, constituted of REO (most of it land and dwellings) in the value of hundreds million euros, whose dimension is yet to define.

Original Story: El Confidencial | Jorge Zuloaga
Photo: Bankia
Translation and Edition: Prime Yield

Greek banks remain cautious about the securitization of NPL

6 March, 2019

Greek banks remain cautious about the two alternative proposals for the securitization of non-performing loans (NPLs) presented to them by the Hellenic Financial Stability Fund (HFSF) and the Bank of Greece. They expect to see details and want to know whether one or both of them obtain European Commission clearance, local bankers told a forum in Athens on Friday.

The Greek credit system has a large backlog of non-performing exposures, amounting to some €85 billion in end-September 2018, or about 45% of all loans.

To tackle this problem of the credit sector and the economy in general, the HFSF has proposed a plan providing for the creation of bonds out of restructured NPLs (so-called securitization) whose repayment will be guaranteed by the state in case borrowers are in distress even after the restructuring of the loans.

Simultaneously, the country’s central bank is tabling another plan for the creation of a special purpose vehicle to which a large part of the banks’ NPLs would be transferred along with the lenders’ deferred tax credits.

Speaking at an event on NPL investment held in Athens, Bank of Greece Deputy Governor John Mourmouras said the two plans complement each other, adding that «the securitization schemes are the silver bullet for the NPL problem» because «a more hands-on solution» is required.

Both plans will be voluntary, but banks remain reserved toward them at this stage. Spealing at the same event, Charoula Apalagaki, secretary general of the Hellenic Bank Association, stressed that «We have not yet received the final drafts of the plans, and you know the devil is in the detail. It is fine to have more tools, to give banks the option to use one or the other, but the plans have not matured yet and we have not yet received feedback from (the European Commission’s) Directorate-General for Competition», she said.

Theodore Athanassopoulos, Alpha Bank’s executive general manager for NPL wholesale, was also cautious about the securitization plans, stating that «different banks have different portfolios, and therefore different needs,» but added that «the Bank of Greece scheme has a great potential for sales of loans».

Original Story: Ekathimerini | News
Photo: Bank of Greece
Edition:Prime Yield

Piraeus Bank aims to reduce NPLs by €15 billion until 2021

4 March, 2019

Greek banks still have the highest NPL (non-performing loans) ratio across the euro zone at 44.8%, according to the most recent figures from the European Parliament. And because so, Christos Megalou, CEO of Piraeus Bank, calls on lenders to do more on reducing the country’s bad debt, despite all the significant steps already taken to bring down the level of NPLs.

In an interview to the US media CNBC, the responsible told «the four systemic banks have agreed among themselves to reduce the non-performing loans between now and 2021 by €50 billion. This is almost 28% of the GDP [gross domestic product] of this country. It is a significant percentage vis-à-vis the actual percentage being produced by this country. I would like to see this happening and I would be very happy if we are able to achieve these targets as we have set ourselves out to achieve».

In specific the case of Piraeus, one of Greece’s top banks, the aim is to reduce the NPLs by €15 billion until 2021. This after having reduced bad loans by €5 billion in 2018, the CEO said in Athens.

In the same occasion, the head of Piraeus Bank revealed that there has been strong interest from international funds in buying Greek NPLs. «We had situations where funds were competing and in the process of competition they had to pay a significant amount of money in due diligence to be able to bid for these assets. We are very happy as principal selling those loans of the level of competition and the level of activity we see in the NPL market. I would dare to say that one of the most interesting asset classes in Greece this days is the non-performing loans».

Greece put an end to nearly 10 years of financial help after it ended a third financial rescue in August and has vowed to stick to stringent fiscal targets in the coming years in exchange for some debt relief.

Original Story:CNBC | Silvia Amaro
Photo: Piraeus Bank
Edition:Prime Yield

Haya Real Estate launches the Marconi Project

4 March, 2019

Spanish servicer Haya Real Estate has just launched the Marconi Project: a set of non-performing loans (NPL) secured by real estate collateral owned by Sareb, for more than €188 million, the company informed.

This project is made up of loans that have around 1,445 registered properties under guarantee collected in 33 files. The average ticket for each of the loans offered is around €5.7 million, and 98% of the guarantees associated with these loans are already-completed homes, garages and store-rooms, while the remaining 2% is comprised of land, commercial premises and industrial buildings.

Most of these real estate collateral-backed loans are located mainly in Catalonia, Costa del Sol, Canary Islands and Madrid.

Project Marconi is divided into two phases, a non-biding phase and a biding phase, the first beginning at the end of February and ending in April with the submission of bidding offers and the closing of the transaction.

Haya Real Estate is a Spanish company leader in management of secured credit and real estate assets. Since 2016, the different sales processes launched by Haya allowed the divestment of more than €470 million.

Original Story: Haya | Kreab
Photo: Haya Real Estate
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

Spanish Banks must improve historic lows profit margins

11 February, 2019

The improvement of their profit margins, still at historic lows, is one of the main challenges posed to the Spanish banks in 2019, according to ratings agency Standard & Poors (S&P).

Looking forward, S&P predicts more mergers among medium sized Spanish banksthis year, given the low profit margins that the sector is suffering, and that most are trading in the stock market below their book value. S&P believes that Spanish banks are well positioned, with sanitised balance sheets and favourable perspectives in terms of credit quality. However, the agency points out in its report that, after years of rating upgrades for Spanish banks, which have put them «very close to the levels of December 2011, and even before the crisis», 2019 could also see some downgrades. The agency predicts that in 2019 toxic assets on the balance sheets will continue to be reduced and that the main challenge will remain improving profit margins which remain at historic lows. In fact it is this low profitability which will drive consolidation this year which will help achieve synergies, economies of scale and cost cutting.

At the European level, S&P believe it is very unlikely that there will major cross-border mergers this year, despite the political interest in Europe that there should be. The report signals that «Banking Union is still not complete and the execution risks are greater than in domestic consolidation, where it is easier to find synergies».

Finally, S&P rules out 2019 being the year in which the State gets out of Bankia, where it controls 61.4% of the capital. Rather it predicts a «very gradual» process of withdrawal.

Original Story: The Corner
Photo: FreeImages.com /Xexo Xeperti
Edition:Prime Yield

IMF insists reduction of Greek bank’s NPL must be expedited

11 February, 2019

The International Monetary Fund (IMF) has just reiterated the need to undertake coordinated steps to expedite the reduction of nonperforming loans (NPLs) held by Greek banks.

Greece’s creditors have long cited NPLs as a major vulnerability of the Greek economy.

Speaking during a press briefing in Washington (USA9, IMF spokesman Gerry Rice sid that the organization’s executive board will in March discuss the report drafted by the IMF mission which recently visited Athens within the context of Greece’s post-bailout surveillance.

Original Story: Ekathimerini
Photo: FreeImages.com/Jonte Remos
Edition:Prime Yield

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