Portuguese NPL selloffs triple to €3.5Bn in 2021

Transactions of Non-Performing Loans (NPLs) in Portugal tripled in 2021 with an estimated selloff of around €3.5Bn.

However, according to Prime Yield total transactions are still below 2019 levels, but was triple the €1Bn transacted for 2020 at the height of the Covid-19 pandemic. Nevertheless, it is below (56%) the €8Bn seen in 2019.
However, the expectations for 2022 are fairly optimistic, with an expected sharp increase in transactions as the market continues to briskly pick up, with new NPL portfolios coming onto the market.
This was one of the main conclusions from Prime Yield’s annual market report ‘Investing in NPLs in Iberia’ produced by the consultancy which is part of Gloval, and published on Thursday (25 November) as part of the largest NPL event on the Iberian peninsula ‘NPL Iberia 2021’.
The event was organised by Smith Novak and took place in Madrid where the various challenges that the sector is facing were debated.
In line with the European trend, the volume of NPLs on Portuguese bank books has been falling over the last year by around €5.4Bn between June 2020 and June 2021, which means overall the global figure has gone from €14.2Bn to €8.8Bn for the 12 month period.
In the same way, the ratio of NPL, (this means the weight of the total amount of credit default measured against the total amount of credit lent) is also going down, from 5.7% to 4.2% for the period under analysis.
However, despite these improvements, Portugal continues to hold the 5th highest amount of NPLs in Europe, only overtaken by Greece (14.8%), Cyprus (9.1%), Bulgaria (6.4%) and Poland (5.2%).