Project Gold: Bankia Puts €180M Loan Portfolio Up For Sale

20 February 2017 – Expansión

Bankia, the fifth largest bank in Spain, has just put a €180 million doubtful debt portfolio up for sale. The package contains loans to property developers and is being marketed under the name Project Gold, according to market sources.

Specifically, the portfolio comprises loans granted to small and medium-sized companies in Spain, many of which are property developers.

Last year, the entity managed to close several operations of this kind for €455 million in total, according to its income statement. However, none of those deals featured in the top fifteen largest transactions of 2016 by volume.

Portfolio sales, along with debt recovery processes, have decreased Bankia’s doubtful debt balance by 12.5%, according to annual data. Over the last year, the group has reduced the perimeter of its foreclosed assets by 16.4%. The coverage ratio of its doubtful balances amounts to 55%, which is above average for the sector.

Bankia has a significantly lower exposure to property developer risk than the other large banks because it offloaded the majority of its problematic assets to Sareb, the bad bank, as did the other savings banks that were rescued using public money. Only 1% of Bankia’s business comes from that sector.

Original story: Expansión

Translation: Carmel Drake