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NPL sales in Iberia should reach €28.000M this year
02 December 2019 | Ana Tavares

Marking one more year of great vigour in the trade of NPLs in Iberia, the volume on this type of transactions should reach 28.000 million euro this year.

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It is a market that provides investment opportunities for different profiles and tickets, since Portugal and Spain are at different maturity stages within this market, with different competitiveness and return levels. And it benefits from the investors’ growing interest for this type of assets and for the Southern European markets. This prediction is provided by Prime Yield, part of Gloval, in its latest report concerning this market, “Investing in NPL in Iberia 2019”.

The study predicts that Portugal will register a new record in terms of trading this type of portfolios this year, for a total 8.000 million euro, which exceeds the best expectations, after two years during which this number was between 2.000 and 3.000 million euro and an acceleration between 7.500 and 8.000 million euro in 2018. Thus, the consultant believes the trade of large portfolios will keep driving the market this year, in particular the trade of assets guaranteed by buildings, which are increasingly more attractive within the context of real estate prices growth.

Nelson Rêgo, Prime Yield’s CEO and in charge of Business Development for Investment Funds at Gloval, commented these numbers, stating that «Portugal emerged more slowly in the European map, but gained momentum in the last two years. It is at a stage where there is still much to be done in the main market and where banks are more open to sell this type of assets. From an Iberian point of view, both countries can benefit from the fact that they are at different stages. If it is true that more and more specialised investors will move their focus from Spain to Portugal, looking for higher returns and less polished portfolios, Spain should also receive new investors with a greater appetite for risk».

In Portugal alone, the NPL stock within the financial system reached 21.300 million euro during this year’s 2nd quarter, 8.500 million less than the previous year, as per the numbers from the European Bank Authority. Thus, the national stock is currently equivalent to 3.3% of the total European NPL of 635.800 million euro.

In Spain, the sale of NPLs seems to have reached its peak, after several very dynamic years and an historic 60.000 million euro sold last year. This year, the prediction is for the sales volume to be around 20.000 million euro.

In this country, the NPL stock is still the third highest in Europe, with a total 84.500 million euro, 13.3% of the European total – the numbers reached 98.900 million euro last year.