Novo Banco sells €700 million property portfolio

Novo Banco, a Portuguese banking chain created from the ashes of Banco Espírito Santo in 2015, has begun offloading 9,000 properties worth around €700 million.

According to the business title Jornal de Negócios which quotes Debtwire, the bank has asked Anchorage Capital Partners, Bain Capital Credit and Arrow Global Group to present proposals by the start of October. The offer will be managed by Alantra.

Most of the properties to be offloaded are in Lisbon and Porto and around half are residential properties. The rest comprises commercial assets (25%) and land (25%).

Based on the bank’s half-term financial results, the operation represents around 30% of all the properties that the bank intends to sell.

At a presentation of first half results, the bank’s CEO António Ramalho said that the total value of the bank’s non-strategic assets is worth around €2.3Bn.

This will be one of two sales that the bank will undertake to clear its balance sheet of non-performing assets, most of which result from the financial crisis of 2008-2015 resulting from mortgage and loan payment defaults.

The selloff will prove to be the largest in Portugal’s financial history and will be carried out in two tranches.

The first portfolio of assets is worth around €550 million from loans from 54 large companies while the second tranche worth €1.2Bn refers to credit default from more than 62,000 companies.