12/11/2014 – Expansion
One of the most eagerly-awaited auctions by large international funds is beginning to take shape. BBVA and its advisor KPMG have announced that the sale of the debt collection unit will start together with the new year 2015 and will have been closed by the end of the first quarter thereof.
The process will mark the first huge divestment in a branch by BBVA since the recession hit. Unlike competitors, the bank chaired by Francisco Gonzalez has not awarded its arms with view to obtaining capital gains. For example, Santander did so with its real estate firm Altamira and collection division Reintegra, and CaixaBank granted a part of Servihabitat to a fund.
BBVA started to forge the sale just before summer but the process invoked dissents between the Financial and Risk departments. Moreover, the news caused a commotion in the labor union as the transfer would involve 200 employees of the branch.
The bank looks to finding an industrial partner who would help it to improve its collection performance rather than to obtaining high capital gains.
The Spanish market has been exceptionally popular among international investors that bought servicers and large NPL portfolios from the banks. For instance, Norwegian Lindorff purchased Reintegra and the collection units of Sabadell and BMN altogether. German firm EOS received a part of the business of Popular, Centerbridge acquired Aktua from Banesto and two U.S. funds Elliot and D. E. Shaw bought Gesif and Multigestión, respectively.
Until now, the banks that decided to shed their debt collection divisions (i.e. Santander, Sabadell, Popular, Banesto, BMN and Pastor) at least have earned €500 million from the sales.
Apart from the operation, BBVA has got a €2 billion NPL portfolio up for sale. Several funds bid for the package and it is expected to pay-off €50 million. The 98% discount is applied due to their being delinquent for a long time and the propensity to collect the debt is very low.
Original article: Expansión (by J. Zuloaga)
Translation: AURA REE