BCP sells €80 million portfolio: distressed loans and real estate

Miguel Maya continues the "normalization" process with additional sales of distressed asset portfolios. The bank has already doubled its value on the stock exchange in 2023, reflecting good momentum.

In a year of "normalization", Banco Commercial de Portugal (BCP) continues its efforts to clean up its balance sheet and has just put a new portfolio of troubled assets on the market with an accounting value of 80 million euros, two market sources told ECO magazine.

The so-called "Grace" project includes about 64 million euros of an insolvent secured loan and another 15 million euros of real estate, one of the sources said.

Officially, BCP declined to comment, but the Miguel Maya-led bank is one of the most active participants in the distressed asset market this year.

Lately, as ECO reported in September, it has put 65 million euros of insolvent loans at Light up for sale, after selling its position in the Corporate Restructuring Fund, which manages exposures valued at around 70 million euros, to electrical cable manufacturer Cabelte and ceramic products group Carlos Cardoso da Mota in the summer.

These sales are aimed at clearing the balance sheet of troubled assets that significantly impact the bank's capital. By the end of September, BCP had about €790 million in insolvent loans and other nonperforming assets worth €1.23 billion, down nearly €400 million from the same period a year earlier and reflecting the sale of ECS restructuring funds at the end of 2022.

NPE coefficient fell from 3.7% to 3% in the period, already lower than planned in the bank's strategic plan.

On the other hand, this process continues with warnings of rising defaults, given the rise in interest rates causing hardship for families and companies, as well as the outlook creating uncertainty in the economic scenario.

While Miguel Maia dismisses "the problem as a whole, with a systemic dimension that could portend a significant increase in non-payments," as he said at a conference on the results of the first nine months of the year, although he recognizes that "there are many cases where clients need support." "If you look at the forest, there is no reason to say we will have a common problem," he emphasized.

The reduction of defaults is part of the bank's normalization plan, and 2023 will be a turning point. BCP is on its way to a historic result.

Significant strengthening of capital ratios opens up the possibility of dividend distributions that even the new depreciation cushion required by the Portuguese bank to counter the crisis in house prices will not be able to stop.

Flecting the good momentum the bank is experiencing, and when the problems in Poland seem to be having less of an impact, the shares have already doubled in value in 2023. At the end of the trading day on Tuesday, they were worth €0.2937, accumulating a gain of 100.61% YTD - in contrast to the market's 10% rise. BCP currently has a market capitalization of €4.4 billion.