Bankia Prepares €1bn Toxic Asset Sale to Digest BMN’s Real Estate

17 May 2018 – Voz Pópuli

Bankia is working on one of its largest divestments since José Ignacio Goirigolzarri took charge of the group. The nationalised entity is assessing the sale of a portfolio of problem assets worth €1 billion, the largest since 2015, according to financial sources consulted by Voz Pópuli.

The bank’s teams have not defined the exact perimeter of the portfolio yet nor have they prepared the sales documentation together with an advisor. Nevertheless, the plan is that the project will come onto the market in the summer and be closed during the final quarter of the year.

The portfolio will contain flats and real estate loans inherited from Bankia’s former savings banks as well as from BMN, the group that it merged with at the end of last year. The increase in the size of the portfolio with respect to previous years is precisely due to the integration of the group chaired by Carlos Egea, which contributed €4.4 billion in toxic assets to Bankia’s existing €12.8 billion portfolio.

Strategic objective

In the strategic plan, announced at the beginning of the year, Goirigolzarri stressed the objective of reducing its exposure to problem assets by almost €3 billion from €17.2 billion at the end of 2017. During the first quarter, it managed to clean up €600 million. That rhythm, together with the portfolio that it is working on, would enable it to meet the objective in 2018.

For the time being, Bankia is not working on any multi-million euro operations, such as the ones closed last year by Santander and BBVA, and the one that Banco Sabadell is currently exploring.

By contrast, Bankia is placing portfolios of between €200 million and €500 million on the market to maximise the return that it obtains for its shareholders.

In this vein, it has Project Beetle underway, containing €400 million in problem loans, and it recently put Project Vera on the market, comprising €250 million in non-performing loans. Moreover, it has sold a portfolio worth €300 million to the fund GoldenTree Asset Management, according to El Independiente.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake