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Restructuring financial sector – NPL’s and REO’s

In the last few years we've observed a reduction of non performing assets in Portugal – mostly non performing loans (NPL) and real estate owned (REO) – namely through portfolio sales. 

In these situations, financial institutions do not always have the necessary resources or all the know-how and experience to put together and manage a structured selling process from beginning to end.

We are advisors in transactions in the financial sector in Portugal for over 25 years. Our involvement in most portfolio transactions in the market confirms the confidence of financial institutions and investors in PwC and our insight of what is required to generate value from such transactions.

We work with several investors interested in different kinds of  portfolios, making the connection between investors and financial institutions.

We have a dedicated team of professionals with know-how, network and experience to assist you in buying and selling NPL and/or REO portfolios, enabling value maximization for financial institutions and investors. 

We are part of the Portfolio Advisory Group, a team at global scale, composed of specialists in advisory of portfolio transactions coming from several geographies where PwC is present.

 

We help our clients with

Portfolio sell-side (NPL and REO)

From our experience, clients who seek for this kind of services face the following situations:

  • Requirement from the regulators to comply with the prudential rules
  • Capital consumption by non-core assets, penalizing the financial solvability of the institutions
  • Transfer the burden of the credit settlement to the buyer

In portfolio transactions we advise the client in every stage of the process:

  • Stratification and definition of the transaction perimeter
  • Portfolio assessment and definition of a reference price
  • Preparation of the selling documents
  • Approach to the market through the contact with potential investors
  • Receiving and review of binding and non binding offers
  • Assistance in the negotiation and signing of the contract, and executing the sale
  • Coordination of all interactions with stakeholders involved in the process

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Portfolio buy-side (NPL and REO)

Acquiring portfolios may be interesting for an investor with financial capacity and wishing to allocate liquidity to a risky asset, but with considerable yield

PwC has a multidisciplinary team with competencies and experience attuned to the nature of the portfolio – Corporate, Residential Mortgage, REO, Unsecured, etc – enabling a careful analysis of the portfolio to be acquired

In these situations, we work with the potential buyer, advising him in defining options for an exit strategy for the assets in the portfolio, depending on the nature of the portfolio and focusing on:

  • Credit review, collaterals and underlying business
  • Definition of possible work-out strategies for recovery
  • Estimate on the periods and amounts of credit recoveries
  • Project management of the whole process coordinating the different stakeholders (sellers, advisors, etc) involved in the transaction

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Project Management (PMO)

PwC offers the Project management service of the whole process, coordinating the various stakeholders involved in the transaction

  • We position ourselves on the buy and sell sides
  • Coordinating other stakeholders included in the work team (real estate appraisers, lawyers, service providers, and others)
  • Setting out deadlines for each task to ensure they are complied with
  • Management of the Q&A process, gathering and reviewing the flow of queries from other advisors and establishing contact with advisors on the buy/ sell side

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Post-transaction follow-up

After NPL/ REO portfolio transactions, we advise our clients on the implementation of the exit strategies, namely by negotiating with the debtors and defining a restructuring plan, therefore ensuring a trustworthy link between investor and debtor.

Our services include:

  • Independent review of the debtor’s business and the business plan
  • Evaluation of the sustainable debt of the company
  • Follow-up on the implementation of a restructuring plan and periodic progress reporting to the investor
  • Monitoring and periodic updating of the business plan

Learn more

 

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PwC's European Virtual M&A Banking Series

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PwC's European Virtual M&A Banking Series is launching in March - we will be exploring the disruptive forces affecting the future of banking and specifically their impact on M&A opportunities. Go to our website.

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António Rodrigues

António Rodrigues

Restructuring Advisory Partner, PwC Portugal

Tel: +351 213 599 317

Cláudia Rocha

Cláudia Rocha

Strategy Advisory Partner, PwC Portugal

Tel: +351 213 599 317

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