The six biggest banks operating in Portugal sold more than 5.7Bn€ in non-performing loans and toxic assets over last year in order to fulfil regulatory demands.
Even though Portugal, Spain and Italy have followed different strategies on reducing their non-performing loans (NPL), both countries are being successful in cleaning up these toxic assets from their banks. This is Moody’s opinion in a recent report that was published this Tuesday, on which it foresees that NPL reduction will continue.
Notwithstanding the undergoing efforts, Moody’s Senior VP Maria Cabanyes said she hopes that banks keep pursuing their goal of converging with EU average, despite the three abovementioned countries still registering high levels of non-performing loans.
In Portugal, the banking sector has been pursuing a strategy that consists of selling their toxic assets. The six biggest banks operating in Portugal sold more than 5.7Bn€ in non-performing loans and toxic assets over last year in order to fulfil regulatory demands. Novo Banco was the one leading these efforts by announcing to sell 2.150 M€, a strategy that is still ongoing.
In total, NPL dropped by 11% last year. Despite considerable progress, there are still 25.8Bn€ to be cleansed. The banks in Portugal are still urged to tackle their NPL ratio, which stands at 9.4% above the limit imposed by the European Banking Authority.