27 April 2016 – Expansión
Spain’s banks still need to get rid of €350,000 million of problem assets from their balance sheets, despite having already divested €65,000 million over the last five years. The leaders in the disposal of non-core assets so far have been CaixaBank, Sabadell and Bankia, although experts indicate that divestment of toxic loans and foreclosed assets may taken another ten more years.
That was the view of the Heads of Advisory for Financial Divestments at KPMG, Deloitte, N+1 and PwC. “After ten years in this market, I think that we still have another ten years worth of divestments ahead. This market is here to stay”, said Joel Grau yesterday, Partner and Co-founder of N+1’s Corporate Portfolio Advisors, at an event organised by Europa Press and Servihabitat.
In recent times, the rate of asset sales has amounted to between €16,000 million and €22,000 million per year and experts at KPMG predict that this year will be the second best in the history of the sector in Spain: “We expect to see an increase of 7% in terms of portfolio sales with respect to 2015, to reach €19,500 million, with the weight of mortgage portfolios and foreclosed assets accounting for 49% of the total”, said Amparo Solía, the Partner responsible for Corporate in the Finance and Real Estate Sector at KPMG, the consultancy firm that participates in half of all operations.
Of that figure of almost €20,000 million, there are currently almost €15,000 million in the market, according to Jaime Bergaz, the Partner responsible for Deals – Financial Sector at PwC. Of that amount, around half relates to portfolios with a real estate component: debt to property developers, mortgages and foreclosed assets.
Once again this year, the entities that are proving to be most active in the divestment market are Sabadell, CaixaBank and Bankia. According to KPMG, those three financial groups have sold off problem assets amounting to €17,000 million in the last three years, which represents 30% of all of the assets sold by Spain’s banks.
Bankia is the leader in the ranking, with €9,000 million sold in the last three years, according to the different consultancy firms, followed by Sabadell, with €4,500 million and CaixaBank, with €4,000 million. (…).
Sareb, BMN, Santander and BBVA have almost sold portfolios worth more than €2,000 million in the last three years.
In addition, Sabadell currently has two portfolios up for sale worth €1,300 million and is studying the possibility of bringing a third onto the market worth €1,700 million. Meanwhile, CaixaBank has an operation underway involving a portfolio of doubtful debts to property developers, worth €800 million; and Bankia is considering launching the sale of a package of doubtful mortgages. Moreover, Cajamar is also proving very active; Abanca has a portfolio of NPLs up for sale; and Popular is expected to be involved in some major deals during the second half of the year.
Solía, from KPMG and Grau, from N+1, predict a higher volume of portfolio sales in 2017, due to the new provisioning circular and the banks’ need to increase their returns.
Ahead of this improvement, funds are already managing 80% of the banks’ problem assets, through platforms that they have been buying up in recent years. Investors paid €4,000 million for the servicers and have absorbed 3,200 jobs from the financial institutions.
The acquired platforms include Altamira, in which Apollo owns an 85% stake; Aliseda, in which Värde and Kennedy Wilson hold a 51% stake; Servihabitat, of which 51% is controlled by TPG; Haya Real Estate, which Cerberus acquired from Bankia; and Aktua, which Centerbridge bought from Banesto and is now selling to Lindorff. (…).
Original story: Expansión (by J. Zuloaga)
Translation: Carmel Drake