NPL Chart of the Week: 27 August 2019
The largest ever Ukrainian NPL portfolio sale, with gross book value (GBV) of EUR 413m equivalent, was completed on behalf of the Deposit Guarantee Fund (DGF) of Ukraine on August 14, according to a press release this week from First Financial Network (FFN), which conducted the sale.
The portfolio, consisting of 290 NPLs from 12 intervened banks, follows the first ever bulk Ukrainian NPL sale, a EUR 235m equivalent portfolio, in December 2018. FFN is selling over EUR 2.5bn GBV of portfolios in September and October, and has a total pipeline of EUR 15bn of Ukrainian NPLs and REOs to sell on behalf of the DGF and the NBU, according to the statement.
Ukraine is sitting on the largest NPL pile in Central and Eastern Europe at EUR 20.1bn equivalent, according to the most recent data from the European Bank Coordination "Vienna" Initiative. At 54%, the country’s NPL ratio is over 10 times the unofficial ECB target rate of 5%.
Poland has the second largest NPL volume in the region, at EUR 13bn equivalent, but an NPL ratio of only 4%. The largest NPL sale in Poland since 2015 was closed in April, according to the Debtwire NPL Database. The PLN 5.7bn (EUR 1.3bn) unsecured portfolio was sold to Hoist Finance by GetBack.
Regulatory changes to bring Ukraine in line with international standards may act as an incentive for investors, according to PwC. In July 2018, the Ukrainian parliament adopted a law strengthening the creditor protections.