Receivables purchasing in Portugal: trust makes the difference.

Working with ServDebt, EOS has bought additional debt packages in Portugal, the latest of several substantial transactions with a total value of just under EUR 800 million. It’s a success story that started with an experiment.

NPL
  • For EOS, Portugal is a comparatively young market for receivables purchases.
  • With the support of ServDebt, EOS has been able to acquire nine debt packages to date.
  • Tougher competition expected at present.

It all started with an experiment to buy receivables in countries where EOS doesn’t have a local branch. Investments in places where you don’t have your own local company can work by forging alliances with external partners. These partners are familiar with their specific markets, but may not have the financial means or strategic fit to undertake substantial debt purchase transactions.

Felix Beutler, Senior Manager International Business Development at the EOS Cross-border Center.
Felix Beutler, Senior Manager International Business Development at the EOS Cross-border Center.

This is where “Debt Collection 4.0” plays a key role, i.e. close, highly trustful partnerships in markets that are new to EOS. Like Portugal, which although a fairly small country is an attractive market with great with a big Non-Performing Loan stock and good legal frameworks. And with the support of ServDebt Capital Asset Management as our highly competent partner.

2015 was the kick-off with the first portfolio. In the meantime, the experiment has been successfully implemented in practice. And EOS has become a household name in Portugal. “We are invited to participate in all relevant tenders for unsecured portfolios,” says Felix Beutler, Senior Manager International Business Development at the EOS Cross-border Center. This does have consequences, Beutler adds with a grin. “To the annoyance of some of our competitors.”

Debt packages acquired consist of some 70,000 receivables

The partnership recently spawned a new success – the purchase of another debt portfolio that brings the total value of the portfolio to almost EUR 800 million. The nine packages purchased until today consist of just under 70,000 receivables in total. They cover the entire spectrum of unsecured banking products: consumer credits, credit card debts, overdrafts, mortgages and car financing tails and other receivables.

In this context EOS provides the capital and ServDebt handles the debt collection process. Not an easy task when dealing with some 30,000 defaulters consisting of private individuals and companies. “The most important aspect is communication and especially an appropriate and individualized management of the debtor-approach,” says Ana Duarte Esteves , Chief Legal Operations at ServDebt. This applies from the very beginning – and for everyone involved. 

Ana Duarte Esteves, Chief Legal Operations at ServDebt
The most important aspect is communication, especially an appropriate and individualized management of the debtor-approach.

Ana Duarte Esteves, Chief Legal Operations at ServDebt.

EOS and ServDebt: Close cooperation makes the difference

ServDebt, which is based in Lisbon, also handles the communication with the seller. In the event of a tender, ServDebt and EOS Risk Management work in parallel to calculate a possible purchase price. Trust and intensive dialogue are absolutely essential. In addition, every single sentence in the contract drafts is scrutinized. Finally, a committee decides on the maximum bid. 

Using this approach, EOS and ServDebt have been able to win roughly half of all tenders since 2015. The field is becoming more crowded and the competition tougher: “In 2019 we expect there to be more participants and even more aggressive pricing strategies by our competitors,” says Beutler. Nevertheless, EOS will still be able to extend its strong position on the market, thanks to “Debt Collection 4.0” and process experience that we have built up, and the close collaboration with our local partner.

Felix Beutler, Senior Manager International Business Development at the EOS Cross-border Center.

Contact EOS

Photo Credits: Getty Images / Stephen Knowles Photography, Getty Images / Paul Bradbury, EOS, privat

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