Oitante profits up 90% last year. Vehicle that manages Banif has already paid off all debt to Santander and now wants to resume dividends to the Resolution Fund, despite the crisis in sight.
Oitante almost doubled profits last year, reaching a sum of €24 million, thanks mainly to a recovery in property sales. However, the vehicle that manages the assets of the former Banif warns that the stagflation scenario that is forecast could affect the dividends to be paid to the Resolution Fund.
Unlike last year, when it paid a dividend of 15 million to the shareholder, the company managed by Miguel Artiaga Barbosa opted this time to withhold the results, not least because its priority was to repay all the debt contracted with Santander in 2015, when Banif was resolved and Oitante was set up.
This happened at the end of last month, when the last €18 million of the €746 million debt was repaid, ,more than three years before maturity and which will help save €110 million in interest.
Once this debt has been paid off, the second major goal of Oitante’s strategic plan is to return to dividends, but it issues a warning to the Resolution Fund: the “value may be affected by the stagflation scenario of the Portuguese economy that some economists are beginning to predict, given that, on the one hand, record inflation figures are forecast for 2022 and, on the other hand, uncertainty and instability are a strong threat to economic growth,” says the board of directors in its 2021 annual report.
To achieve this goal, Oitante says it will continue to sell the real estate assets it still owns (over 1,500 properties) and recover bad loans: it has a portfolio of €194 million, spread over 798 debtors, but only 13 million is credit in good standing).
It also says it is “essential to maintain the divestment of the remaining financial holdings, private equity funds, and real estate investment trusts”. One of the big deals concerns the sale of ECS funds to Davidson Kempner, which is not yet concluded. “At this moment, there remain open variables so there is still some uncertainty surrounding the completion of this operation,” Oitante explains.
According to Oitante, the profits of €24 million – compare to the €12.6 million registered in 2020 – were mainly due to growth in income and control of operating and financial costs.
Oitante’s total income amounted to €76.2 million, up 43% on the previous year, “due essentially to the increase in sales of real estate assets held directly by Oitante and by real estate investment funds held by” the company.
Last year’s performance allowed Oitante to strengthen its equity by 21.6%, reaching €135 million, which compares with €50,000 just at the time of its start-up in December 2015.
The company closed 2021 with 50 employees, one less than at the end of 2020, but is expected to reduce staff further as a result of asset sales.