Deutsche Bank Purchases Europe’s Largest NPL Portfolio From BBVA

24/11/2014 – Expansion

BBVA has just sealed the biggest non-performing portfolio deal recorded since the Spanish and the European recessions began.

Namely, the bank chaired by Francisco Gonzalez has transferred a €1.7 billion worth of delinquent loans to Deutsche Bank. Due to the portfolio being 100% provisioned, BBVA might have reaped up to €50 million in capital gains.  Both entities refused to comment on the matter.

This sale represents one of the multiple operations carried out by Spanish banks striving at shedding unproductive assets and focusing on their core business.

Advised by N+1, Project Saturn included 8-years overdue loans which BBVA classified as unrecoverable. The portfolio is made up of personal loans without real estate collaterals and linked to consumption and credit cards.

Over 15 funds asked about the operation, like U.S. Perry Capital, Savia Asset Management, Malasian Aiqon or Norwegian Lindorff, to name few most famous.

Year-to-date, the biggest NPL portfolio sales sealed during the crisis amounted to €1.2 bilion and €1.5 billion, carried out by CatalunyaBanc, Bankia and BMN.

The New Player

This is the first distressed loan purchase in Spain by Deutsche Bank’s London-based independent affiliate specialized in this kind of assets. Deutsche Bank has been eyeing the Spanish debt collection market for months, with no successful acquisitions though.

The German entity is principally interesed in the return the portfolio may produce. After having obtained a 97-98% discount on ‘Saturn’, the bank expects to recover more than a double of that. Instead of creating its own agency, Deutsche Bank will outsource the loan management to Spanish firm TDX Indigo.

Apart from this distressed debt portfolio, the entity bought two real estate-backed credit packages from Sareb (Spain’s bad bank) last year. Altogether, they were a worth of €300 million and had commercial properties in Madrid and Barcelona as collaterals.

In the last months, the German bank has taken part in a bidding for the Spanish-property secured portfolio of Eurohypo and, competing with Oaktree, Pimco, Marathon and Finsolutia it vied for the troublesome loans of Catalunya Banc. In both processes Deutsche Bank offered the second-best bid.

BBVA prepares a sale of its collection agency scheduled at the beginning of 2015.


Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE