Novobanco sells non-performing loans to Deva fund

Novobanco has sold a portfolio of non-performing loans of about two dozen large debtors to the Deva fund, according to information gathered by ECO. At stake is the so-called “Harvey Project”, which included (in the initial version) debts of customers known to the public, such as construction company Grupo Lena (€180 million) and Urbanos of Alfredo Casimiro (€9 million).

This portfolio initially had a gross book value of €640 million (not counting impairments), but the final perimeter was changed by decision of the Resolution Fund, under the powers granted to it under the contingent capital agreement.

Deva presented itself to this process with Arrow, which should be the servicer of this portfolio, that is, it will manage these debts. This consortium beat Davidson Kempner, which, as ECO has already reported, has just started negotiating with a group of banks to buy a portfolio of luxury hotels in Portugal, among other real estate assets. The deal is estimated to be worth €900 million.

Novobanco declined to comment on this operation. Besides Harvey, the bank has another non-performing loan portfolio underway: the so-called “Project Orion”, valued at €200 million.

These NPL portfolio sales are part of the strategy to reduce the bad debt ratio to levels below 5% in the coming years. This indicator reached 7.3% in September. After years of losses, the institution made a profit of €159 million up to September, with António Ramalho highlighting the “turn of the page” towards a path of growth and positive results.