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CGD Sees Decrease in Restructuring Funds and Real Estate Assets in 2020

15 February 2021 – Ana Custódio

According to Caixa Geral de Depósitos’s (CGD) annual accounts, the bank’s exposure to restructuring funds decreased in 2020, even as it also shed non-performing loans and real estate assets.

The bank led by Paulo Macedo, which had €607 million in real estate assets in 2016, saw its exposure fall to €228 million, net of impairments, at the end of 2020. The state-owned bank had aimed to reduce its exposure to less than €500 million in real estate assets, freeing itself over the past four years of almost €380 million.

The financial institution has accompanied the sector’s efforts to resolve its balance sheet problems with bad debts and real estate assets by selling portfolios to international funds.

Alongside these measures, CGD reassessed its exposure to recovery funds in the final quarter of last year, suffering a €15 million impact on the result. Recovery fund exposure fell 17% to €444 million, from €533 million in 2019.

ECS Capital recently placed three large recovery funds, where CGD has significant exposure, on sale. The funds have a net asset value of approximately €1.5 billion, and there are at least eight international funds in the running. The sales price, however, could eventually be agreed to for a lower figure.

The financial institution also has exposure to several restructuring funds in addition to ECS. CGD holds shares in Oxy Capital’s Fundo Imobiliário Aquarius, Fundo Imobiliário Veja and Vallis Construction Sector.

Translation: Richard Turner