The 2020 edition of the “Keep an Eye on the NPL & REO Markets” report from the consultant owned by Gloval, shows that last year was once again dynamic concerning sales of this type of portfolios. The Portuguese market represented 27% of this volume, for a total 8.000 million euro, a record high reached for the first time in 2018 and repeated in 2019.
Spain’s NPL transactions reached a total 22.000 million euro, 73% of the whole, a drop when compared to the previous year, after the record 60.000 million traded in 2018.
For this year, Prime Yield predicts both markets will follow the «strong activity» trend registered last year. Nelson Rêgo, Prime Yield’s CEO, commented that «now that the big bank portfolio sales boom seems to have been left behind in Spain, businesses in the secondary market and securitisations seem to be covering ground. This means that there are still many interesting opportunities in this market, which is one of the most mature in Europe. It is thus expected that the sale of these type of portfolios will stabilise in 2020, following 2019’s activity level».
The CEO explained that «following the trend of 2019, investors’ appetite towards the Portuguese market should remain high in 2020. The reduction in NPLs will remain a priority for the Portuguese banks during the next 12 months, since, despite the progress achieved during the last 4 years, Portugal maintains one of the highest NPL ratios in Europe».
A decrease is expected in Portugal, since the largest portfolios were already traded. And there are increasingly less opportunistic investments, which shows a sector that is more mature and now has 21.700 million euro in NPLs, 29.300 less than during the record high of June 2016.
In Spain, the stock keeps decreasing, having reached 61.500 million euro, 135.700 million euro less than in December 2013, when the sector reached its peak. 2019 confirmed the slow-down in trade for this type of portfolios.
And he concluded that «players from all over the world see in these debt portfolios interesting investment opportunities, at a time when, despite the good economic prospects and advances, many countries still have high NPL stocks to fix their financial systems».