Bankia Plans To Reduce Its NPL Balance By A Further €2,000M In 2015

9 March 2015 – Expansión

Bankia hopes to reduce its non-performing loan balance by another €2,000 million in 2015, whereby repeating the success of 2014; it also expects to close the sale of new bad debt portfolios during the year.

At a recent meeting with analysts, the CEO of Bankia, José Sevilla, said that the bank has the capacity to continue decreasing its bad debt balance, which amounted to €16,457 million at the end of 2014, €3,475 million lower than a year earlier.

During 2014, Bankia reduced its non-performing loan balance by €1,900 million (organically) and sold loan portfolios amounting to €1,600 million.

And the forecasts for 2015 are equally optimistic, since Sevilla expects that the doubtful balance will decrease by a further €2,000 million organically and in parallel, Bankia expects to close the sale of new bad debt portfolios.

He revealed that the bank currently has several bad debt portfolios ready for sale and it is finding investors that are willing to pay “better” prices, added the “number two” at the group chaired by José Ignacio Goirigolzarri.

By way of example, he cited portfolios of loans to specific businesses, such as those relating to the hotel sector, where the entity has already found buyers that are offering “reasonable” prices.

The organic reduction in the bad debt balance, together with the sale of new portfolios, makes the CEO think that 2015 will be another year in which Bankia will significantly reduce its doubtful debt balance and therefore its default rate, although that will also be affected by the evolution of its loans.

At the end of 2014, the entity’s default rate was 12.86%, the lowest rate in two years and significantly lower than the figure recorded a year earlier (14.65%).

Original story: Expansión

Translation: Carmel Drake