Paulo Macedo says he only sold real estate portfolios to European entities

“This semester we sold a significant number of properties, but not wholesale, we sold 583 properties for 70 million euros. This semester we have another 263 properties with adjudicated sales of 34 million euros ”, detailed the president of Caixa. The ECB has not let banks hold properties on balance sheet for more than two years.

Cristina Bernardo

"We don't usually finance the sale of portfolios." CGD's CEO, Paulo Macedo, thus answered the question that makes the association of ideas with the news about Novo Banco having sold a portfolio of properties (Viriato), in 2018, to the Anchorage Capital Group fund, having this resorted to credit from the bank itself, according to the Público newspaper, which also said that this company would have a vehicle in the Cayman Islands.

Regarding the financing to the buyer of the portfolios, the CEO of the public bank later said that, of all the portfolios sold, he will have only about 2% of the credit operations. "But we don't usually finance the purchase of portfolios."

However, the bank gives credit to customers for the purchase of CGD properties, sold individually. "All banks finance their own properties when they sell them," he said.

"Caixa sells about three times more through its commercial network, promoters, through the internet, than wholesale through portfolios", explained the CEO.

Paulo Macedo explained that, with each entity with which CGD transacts assets in the structured sale of portfolios, it identifies the shareholder structure and beneficial owners. Do a search for sanctioned entities. The direction of compliance does research on calls from these companies. Then, a more exhaustive analysis of the buyer is carried out, namely searches on the money laundering list and requests for bank details, in addition to compliance risk opinions.

“In any case, CGD only sold portfolios to companies based in the European Union and to vehicles based in Europe. "We have no entities in Cayman or elsewhere than in Europe," said the bank's president.

Then Carlos Albuquerque, director of CGD, with the real estate portfolio, told Jornal Económico, on the sidelines of the press conference for the presentation of results, that there is a rule by the supervisor that prevents banks from staying more than two years with properties on balance , and that every year banks have to make a report of the list of properties and the deadlines foreseen for sales. This creates enormous pressure on banks to sell these assets. The maintenance of properties on the balance sheet beyond the two years allowed by the ECB only with authorization from the banking regulator.

CGD reported a 7,8% reduction in terms of properties for sale in the semester (43 million euros), now totaling 517 million euros in gross terms (there are impairments of 49% of this amount on this amount, therefore the net value of 264 million).

"We did not sell any portfolios in the semester and we are not planning to sell any real estate portfolios in the next semester," guaranteed Paulo Macedo. "

“This semester we sold a significant number of properties, but not wholesale, we sold 583 properties for 70 million euros. This semester we have another 263 properties with adjudicated sales of 34 million euros ”, detailed the president of Caixa. So 100 million euros, but not via portfolios.

“We are in no hurry to sell real estate, except for those that are potentially losing their value. Look at the properties related to shopping centers, ”said the banker.

These properties are donations in compliance with credit, or bad debt collateral.

The Bank recorded impairments of 156 million (credit and bank guarantees), in the six months, due to macroeconomic projections, although the NPE ratio is not getting worse, and NPL (NPL ratio 4,4% and net of impairments 0,6 , 3,6% and NPE of XNUMX%).

"The vast majority of these impairments are to cope with macroeconomic projections of deterioration in the conjuncture, because we have little input from the bad guys again," said Paulo Macedo.

“If we exclude these impairments, we would have a negative value because the recoveries that CGD had in the semester were higher than the new specific impairments for credit and guarantees, which were 113 million, which includes generic provisions and the net balance of recoveries made until June, and some specific ones that have been set up, ”said José de Brito, CFO of CGD.

“We had 147 million euros of credit impairments, 35 million provisions for bank guarantees. These two components incorporate the 156 million euros of reported impairments. The new specific impairments were 24 million euros. The recoveries were 69 million euros.

“We are recovering credits now from the crisis of 2008 and 2010. We have orders from the court that are given now, regarding the ranking of credits, bankruptcy, etc. Fortunately, the cases are coming and CGD is recovering part of its losses ”, announced the CEO.

Today, GDP data show a 16,5% drop in the second quarter. Banco de Portugal predicts a 9% drop in the Portuguese economy for the year as a whole.

The recovery and cures justify the decline in the NPL ratio. "But also small sales of credits, with no write-offs in the period, and there was an inflow of 100 million new NPLs in the half, in line with the normal flow to CGD's portfolio," said José de Brito, administrator bank's financial

CGD reduced the stock of non-performing loans (NPL) from 2,7 billion to 2,6 billion, the only part that is not covered by impairments being around 300 million.

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