Novo Banco sells Grupo Lena and Alfredo Casimiro’s Urbanos debts

  • ECO News
  • 23 July 2021

The Portuguese bank needs to reduce its non-performing loans (NPL) to meet the European requirements.

Novo Banco recently put up for sale a non-performing loan portfolio of large debtors amounting to €640 million. The portfolio is not yet closed and may be altered until the end of this process, as has been usual in these operations. For the time being, the “Harvey Project” have two well-known names: Grupo Lena and Urbanos, owned by Alfredo Casimiro, according to information gathered by ECO.

The bank led by António Ramalho did not comment on the operation, as it said it was subject to confidentiality obligations. It recalls that “as the other banks, Novo Banco is taking advantage of an opportunity and market appetite for this type of NPL”. Caixa Geral de Depósitos (CGD), Santander Totta and BCP also have portfolios available in the market.

In addition, Novo Banco still has a non-performing loan ratio of over 7%, despite its efforts in recent years to clean up the BES legacy (it previously reached a 33% NPL ratio). It still has to reduce exposure to toxic assets to meet the 5% ratio, in line with European requirements.

After years of losses – largely caused by these assets – Novo Banco now wants to turn the page and aims for sustained profits starting this year. For now, it has reached the first quarter with 70 million in results and should present equally positive accounts in the semester soon.

The “Project Harvey” process is still in its early stages. Novo Banco has been contacting potentially interested parties for a competitive sale process – with the bank expecting a positive result from this operation.

From the information that reached the market, it was possible to understand that the construction company owned by the Barroca Rodrigues family will be the largest debtor that integrates this NPL portfolio, totalling €180 million.

Regarding Urbanos, owned by Alfredo Casimiro, which has been in the spotlight because of the crisis at Groundforce, it is about €9 million (gross) in bad loans that may now be sold. The portfolio may still undergo adjustments, as happened in Nata 2, incidentally, when the Resolution Fund required the withdrawal of some large debtors from the portfolio sold to Davidson Kempner.