Romania’s BCR bank sells €370mn NPL bundle to debt specialist B2Holding

Romania’s BCR bank sells €370mn NPL bundle to debt specialist B2Holding
By bne IntelliNews September 9, 2016

B2Holding of Norway, via its fully owned subsidiary Ultimo Netherlands, announced in a September 8 press release that it has entered into an agreement to acquire a residential mortgage Non-Performing Loan (NPL) portfolio from Romania's largest lender BCR in a 50/50 partnership with German EOS Investment RO. The portfolio has a nominal value of around €370mn and consists of 6,800 loans secured by real estate collateral.

The bank managed to reduce its NPL ratio to 14% at the end of June from 23.1% at end-June 2015, thanks to recoveries, sales of selected NPL portfolios and write-offs.

The transaction with B2Holding and EOS is expected to close in December.

The net profit of BCR, controlled by Austrian group Erste, rose 5.4% to RON636mn (€141.5mn) in the first half of the year, the bank announced on August 5. The increase was supported by operating performance and continued improvement of portfolio quality, BCR said.

After the fall in BCR’s NPL ratio, Moody’s changed the outlook for BCR's deposits from stable to positive and affirmed the bank's long-term Ba1 deposit ratings and Baa3(cr) Counterparty Risk Assessment (CRA).

The upgrade of BCR's BCA to b2 from b3 reflects ongoing improvements in the bank's asset quality, profitability, capital adequacy and funding structure, Moody's explained. The fall in the bank's NPL ratio from a high of 25.7% at end-2014 was due to the sale and write-off of problem loans, restructuring procedures and increased recoveries as economic conditions improved.

Romanian media reported in July that BCR had completed the sale of a €1.1bn NPL bundle to a consortium formed by Deutsche Bank, International Financial Corporation (IFC) and APS. Dubbed "Project Tokyo", this was the biggest NPL bundle sold in Romania. The discount was around 90%, economica.net claimed at that time. The bank’s NPL ratio decreased by 5pp following the deal.

Country-wide, the NPL ratio calculated under EBA methodology plunged by 1.1pp in June, reaching 11.3% at the end of H1 (4.9% down y/y). This visibly helped the banking system’s performance. Romanian banks achieved an aggregated profit of RON2.35bn (€522mn) in H1, 96% up y/y. Profits were €264mn in Q2, according to bne IntelliNews calculations based on central bank data. This was the sixth quarter in a row of robust profits, achieved amid constant improvement in credit quality.

Related Articles

Russian central bank cuts key rate by 50bp in surprise move

The Central Bank of Russia (CBR) on April 28 announced it is cutting the key interest rate by 50bp to 9.25%, above earlier expectations. In March, after managing to curb inflation to its lowest ... more

Croatian central bank approves sale of Splitska Banka to Hungarian OTP’s Croatia unit

The Croatian central bank (HNB) council has approved the sale of a 100% stake in Croatia's Splitska Banka to Hungarian lender OTP Banka’s Zadar-based Croatian unit OTP banka d.d., ... more

Islamic Development Bank in talks to buy Istanbul stock exchange stake

Saudi Arabia-based Islamic Development Bank (IDB) is in talks to buy a stake in Turkey’s stock exchange, Borsa Istanbul, Himmet Karadag, chairman of BIST, told Reuters on April 19. With a ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss