Month: May 2013

The division in business areas implemented in NCG Bancoa at the end of 2011 was a sign of a future partition process of the institution for a possible sale in pieces. And after the millionaire rescue of Brussels (5.425 million Euros) and the demand in exchange of returning to the traditional banking business, this forecast has become a reality. The bank put his network Evo on sale one month ago (the one which operates outside northwest Spain, with 590 employees and 80 branches) and have just done the same with another two divisions: the asset management unit (UGAS), in charge of the recovery of default credits and other operations; and the real estate area. Another movement has to be added to these previous ones: the sale of a package of branches in Asturias and Leon to another institution, something which is still being negotiated.

The managing director, César González-Bueno, informed days ago all executives and employees involved in these areas. Until now, as explained by the management of the institution to some unions, there are only “initial contacts”, but a certain interest on those divisions has been detected in some funds and companies. The sale of these areas would be a double relief for the bank: an economic one and a labor one. On one side, it receives funds which help to reduce the received aid, to improve its margins and to become a more attractive institution for possible investors. On the other side, it reduces the impact of its fourth dismissal program, planned for 1850 employees. As these divisions are sold with the business (asset) and with managers.

According to union figures, there are around 200 employees in UGAS (Management Unit for Single Assets) and another 110 in the real estate area. The sale of branches in Asturias and Leon could include another hundred employees. The 590 included in Evo, which hopes for an aquirer before the end of 2014, would have to be added to this figure. If finally there is an acquirer, included the staff in these areas, the bank could reduce the planned layoffs to 400, plus the 455 early retirements. Thus, the impact on the personnel would be much lower.

Novagalicia is still digesting the complicated year 2012, the worse year in its history (including the history of the Galician savings bank that created this bank). It closed this year with 8000 million Euros in the red, as already advanced by its president, José María Castellano, in January. This figure was therefore already known.

Yesterday the bank provided the rest of its figures. It has carried out a record restructuring of over 8200 million Euros, converting doubtful credits in default ones, making bad-debt provisions for others….In 2011 this figure stayed below 2000 million Euros. This cleaning exercise, and the transfer of 5096 million  of toxic assets to Sareb (the so called bad bank) has increased the defaulting over 13%. Another negative point is the loss of individual deposits: 4800 million Euros, due to the loss of clients caused by the closing of branches. In credits, it has concentrated on refinancing, small and medium companies and families. The loans to the construction business is only 3,5% of its portfolio; one year ago it reached 22%.

The level of capitalization is over the average. Its core capital ratio, the main indicator of strength, is now at 11,17%. No wonder after the strong injection of public funds it has received.

Source: La Voz de Galicia