The growing momentum of Portuguese NPL sales in two charts

Around €2bn of non-performing loans have been sold in Portugal so far in 2018, while a further €4.2bn of live deals are being tracked, according to Evercore.

Almost €2 billion of non-performing real estate loans have been sold in Portugal so far this year, outstripping the total for the whole of 2017 – €1.1 billion – according to new research by investment banking firm Evercore.

The key Portuguese banks – Novo Banco, Caixa Geral de Depositos (CGD), Millennium BCP, Montepio, Banco BPI – hold just over €30 billion of gross non-performing exposures, equal to a net figure of around €14 billion, the research shows.

CGD has completed a string of portfolio sales since the start of 2017, together having a face value of around €1.6 billion. The bank is currently marketing a further two portfolios of around €600 million in total. Novo Banco is also conducting two processes, the first being the sale of around €1.75 billion of mixed NPLs and the second involving a circa €700 million portfolio of bank-owned property.

Although small compared with Spain or Italy, the loan sales market in Portugal continues to develop, with growth of more than 112 percent in Q3, compared with the previous quarter.

Evercore notes the “strong correlation” between the improving real estate investment market in Portugal, with record volumes of €2.25 billion, and the surge in NPL sales activity. Increased property sales activity has led to additional liquidity in the underlying markets, in turn aiding the recovery proceeds achievable through NPL workouts.