Portugal: Bank BPI sells €400 million of bad loans with gains of €17 million

Login

Register

http://www.clubofmozambique.com/

Portugal: Bank BPI sells €400 million of bad loans with gains of €17 million

8:24 CAT | 01 Feb 2019

Bank BPI sold €400 million in bad loans in an operation that produced gains of €17 million, the bank’s executive president Pablo Forero said.

During a media conference to present the bank’s results in 2018, Forero said the profits gained through the sale proved the bank was “prudent” and that the loans were “well provisioned.”

BPI, which is controlled by Spanish group Caixabank, is looking to sell more loans, he added, without providing further details.

At the end of last year, several banks sold loan books, with the biggest one being that of Novo Banco, which sold 102,000 contracts worth €2.15 billion.

On the sidelines of a conference in mid-January, Novo Banco’s president António Ramalho said the sale of bad loans had seen losses below 6%.

Caixa Económica Montepio sold 10,000 contracts worth €239 million to a company in Ireland, but the impact it had on its accounts is not known.

Banks sell non-performing loans to improve their balance sheets. However, this measure could have a negative impact on results if there is a need to cover the difference between the loans registered and the amount they are sold at.

The Bank of Portugal on 29 January revealed that the total number of loans conceded by banks to families and companies dropped 1.94% in December to €194,602 million compared to the same month the previous year, explaining that this was in great part down to operations of sales of loan books on behalf of banks.

Source: Lusa