Portugal Says It’s Preparing Rules to Help Banks Sell Assets

Portugal’s government is working on rules that may help banks sell certain assets as part of a “comprehensive approach” to address the problem of non-performing loans, Finance Minister Mario Centeno said.

“We are preparing a legislative package that will allow banks to take more value from the restructuring of their loans,” Centeno said in an interview in Washington on Friday. “This means that it will be made easier for them to sell the assets. The value of those assets will also increase because it’s more flexible and easier to do.”

Centeno said “the other front” is the issue of how non-performing loans can “get out” of banks’ balance sheets.

“For that we are also working on a solution, under the condition of course that there is no state aid involved,” he said. “The vehicle must have substantial ownership from the banks and from the private sector.” The government will “very actively” start discussing this with the European Commission during October, according to Centeno.

While Portugal exited its three-year international bailout program in 2014, it’s still dealing with pending issues including bad loans at banks. The country is among six European nations with a non-performing loan ratio exceeding 10 percent, according to its central bank.

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