The Banking Sector Sells 40.000 Properties in the First Half, a 10% Increase

05/08/2014 – Expansión

The banking sector is putting the gas on the sale of homes. The primary banks in the country handed over close to 40,000 properties during the first six months of 2014, a 10% increase on the same period last year.

With these figures, the large listed banks (Santander, BBVA, CaixaBank, Bankia, Sabadell, Popular and Bankinter) have managed to slow down the accumulation of foreclosed assets on their balance sheets, the volume of which has stabilised in recent months and, in some cases, has even reduced.

The best news for the banks is that not only have they sold more homes, but they have done so with fewer discounts and for larger amounts. “The improvement in the property market allows for profitability criteria to be incorporated into the commercial management without slowing done the pace of activity”, CaixaBank affirmed in their presentation of half year results.

In total, the transfer of properties has brought approximately 4,500 million euros to the banks, almost a 20% increase on the first half of 2013. These sales include not only homes – the banks are also moving commercial properties, garages, storage spaces and land.

Another impact of this trend is that the banks are starting to issue more mortgages again. Santander announced that it has increased its issuing of mortgages by 62% and Bankinter has doubled its market share of loans (from 2.8%) within the new mortgages, of which it accounts for 6.1%. This competition has been reflected in the prices offered on mortgages, which have dropped more than two percentage points below the Euribor rate.

The largest player in the property market has come from the hands of Sabadell, which absorbed all the property portfolio of CAM. Through its subsidiary Solvia, the bank has achieved sales of 1,319 million, a 7% increase on the first half of 2013. This has been achieved in spite of selling 3% fewer properties, as many as 7,541. The bank points out that Solvia is focusing on the sale of homes worth more than 100,000 euros, with financing, and that it is already seeing “price increases in some developments”. Madrid, Cantabria, the Basque Country and the Balearic Islands are the regions experiencing average increases of the value of homes, according to data from the Spanish Statistical Office (INE).

BBVA is another of the banks which has upped the pace the most, with 11,402 properties transferred for a total of 910 million in the half. These figures include the sales of property developers, unlike with other banks. Sabadell and BBVA, the only two large banks which have not sold their real estate firms, are the ones which are contributing the most to the upward trend. Hot on the tales of these two groups are CaixaBank and Santander, which sold their real estate businesses to TPG and Apollo, respectively. CaixaBank transferred 7,229 properties in the half, versus Santander’s 6,000, with a 27% reduction compared with 2013. The CEO of the group, Javier Marín, explained two days ago that the entity is avoiding making sales with losses and that it is already noticing price increases “in some segments”. He added that Santander has 159 developments in progress, with 40% of them already sold.

Competition from Sareb

Joining the large banks is a new competitor, Sareb, which a year and a half after its creation is already among the top of the ranks. According to data provided by its president, BelénRomana, this company transferred 5,150 homes in the first four months of the year, which extrapolated to the first half would be 7,725 sales.

Original article: Expansión (by J.Z./A.T./M.G.B.)
Translation: Aura REE