Header image

NPL Chart of the Week: Novo Banco halves NPL volume in two years

NPL Chart of the Week: 10 September 2019


Portuguese bank Novo Banco confirmed the sale of a non-performing loan portfolio with a gross book value of EUR 1.713bn and an approximate outstanding balance of EUR 2.732bn to Davidson Kempner, it announced this week. The sale value of Project Nata 2 was EUR 191m and the transaction will result in a EUR 106m hit to the bank’s income in 2019, the lender said.

The bank has drastically cut its bad loan exposures in the past two years. In fact, Novo Banco's NPL volume dropped from EUR 9.6bn to EUR 6.3bn between the end of 2017 and the end of 1H19.

Furthermore, in August the bank announced the sale of a EUR 388m real estate–owned (REO) portfolio, Project Sertorius, to Cerberus Capital Management.

The combined sale of Sertorius and of Project Nata 2 will bring Novo Banco’s NPL volume down to circa EUR 4.1bn, according to calculations by Debtwire.

“This transaction is a further important step forward in Novo Banco’s divestment strategy of non-performing assets and will accelerate its reduction,” according to the statement.

From a peak of 28.1%, the bank’s NPL ratio declined to 20.7% at the end of 1H19 and could drop to circa 15% with the latest sales, according to the Portuguese press.

As the largest sale by far this year, Project Nata 2 has put Novo Banco on track to be the top seller in Portugal for the second year running. The first Project Nata, with a GBV of EUR 2.15bn, was the largest sale in 2018.

Novo Banco sold EUR 3bn out of total sales of EUR 7.9bn in Portugal last year, according to the Debtwire NPL Database.

Despite a quiet start, the Portuguese market is heating up again, with several sales in advanced stages from the largest banks — Millennium bcp, Caixa Geral de Depósitos and Caixa Economica Montepio Geral.

Millennium bcp has entered exclusive negotiations with AnaCap Financial Partners to sell a portfolio of REOs, Project Pumas, with a gross book value of EUR 210m, as reported.

Amy Finch Data Journalist Debtwire
Amy Finch Data Journalist Debtwire

Debtwire Product Trial

Get these unique insights and more with Debtwire

Debtwire gives fixed income professionals an edge in leveraged finance, distressed debt and direct lending.

Request Trial

Debtwire Events
Debtwire transformed the market and quickly became the leading provider of expert news, data and analysis on global leveraged credit. With global breadth and local depth, our end-to-end coverage goes behind the scenes from primary issuance to the first sign of stress through restructuring and beyond. Subscribers trust Debtwire – the pioneer in the industry – for comprehensive coverage across geographies, companies and asset classes. Backed by Debtwire’s team of experts and award-winning content, our events offer attendees an unrivaled perspective.