In the light of the approaching stress test, the European Central Bank has recently demanded from Spanish entites that they provide it with appraisals done after 1st January 2013.
Therefore, the Bank of Spain obliged financial institutions to update valuation of their nearly 15.000 property-backed loans that create the part selected as a sample for the examination. Considerable part of the appraisals must be handed in this month, while the entire work accomplished by 29th May. The sector repeats that some of the banks might find it difficult to respect the deadlines.
The Bank chaired by Luis María Linde sent methodological instructions to Santander, BBVA, La Caixa, BFA-Bankia, Sabadell, Popular, Bankinter, Unicaja, Catalunya Banc, Novagalicia, Banco Mare Nostrum, Ibercaja, Ceiss, Kutxabank, Liberbank and Cajas Rurales Unidas, the 16 entites embraced by the Asset Quality Review test.
Each of the entities is ought to revise between 800 and 1.500 loans in terms of their risk, grouping them among developer, SME and other credits. Moreover, it is clearly stated that one appraisal company cannot value more than 40% of assets belonging to one bank and that they cannot base on the previous appraisals.
Original article: Cinco Días (by Juande Portillo)
Translation: AURA REE