Magazine Article

NPL Outlook Portugal 2021

By Bruno Carneiro, CEO at Servdebt

When the outbreak of the coronavirus disease (Covid-19) was first reported at the end of 2019 (December), in Wuhan, China, few could imagine the impacts the disease would have globally. For most, it was a disease that would likely have an impact in China's growth, but would not spread across the globe. Fewer could imagine that in a 2 month period we would move from lockdown to lockdown, hospital’s intensive care units would be full of patients fighting for their lives, and that the economy would be hugely impacted. However, that was exactly what happened. The world changed drastically, people were sent home, factories closed, retail stores were empty, and governments barely knew how to act. Some still don’t.


We now wait in anticipation of every word from the government, which now guides everything from Church to school, from funerals to weddings, from businesses to limited exercise outdoors.


All this has a huge impact on the global economy, banks’ balance sheets, and on the levels of non-performing loans (NPLs).


The current pandemic challenges the banking system through unknown tracks. Typically, the increase of non-performing loans on banks’ balance sheets results from wide macroeconomic crises, but not in this case, where the main impact arises from the abrupt freeze in economic activity, even if moratoria on loan repayments and public loan guarantees have attenuated the immediate impact.


Portugal is among the countries in Europe with one of the highest shares of loans subject to moratoria (along with Cyprus and Hungary), and is one of the countries where public loan guarantees are higher (although with longer maturities when compared to the loans subject to moratoria).

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Contributing Editor

Bruno Carneiro, CEO at Servdebt

Bruno is the co-founder and CEO of Servdebt Group and is responsible for setting the overall direction and strategy of the company. Back in 2007, after accruing extensive experience in the Management of distressed loan portfolios for one of the leading asset managers in Portugal, Bruno decided to venture in a new project, co-founding Servdebt. From the get-go, Bruno was sure that there had to be a better way to go about it, and has been one of the driving forces behind Servdebt’s success, leading the company to achieve extraordinary growth since its inception and becoming a benchmark in the Loan Servicing and Distressed Debt sector in Iberia.


Bruno is a graduate in Law as well as a graduate from Católica Lisbon School of Business & Economics and Kellogg School of Management - Northwestern University Advanced Management Program (AMP).

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