BBVA Purchased a €15.3 Bn Worth of Mortgages

25/07/2014 – ExpansionPro

BBVA will take in the total of €63 billion in assets through the acquisition of Catalunya Banc. According to the nationalized entity´s 2013 results, its gross credit stood at €28.2 billion, provisioned with another €3.7 billion equalling to 13% of the entire investment. The portfolio´s default rate posts 13.9% with a coverage rate of 88.4%. However, the bank will contribute with €1.3 billion more, raising the coverage to €125%.

“The portfolio has been adjusted to the highest expected loss, requiring additional correction of 1.8% of its total value”, say experts from Banco Sabadell.

Around 54% of all assets bought by BBVA corresponds to mortgages amounting to a €15.3 billion worth. Default rate on them shows 3.7%. The worst quality loans valued at €6.4 billion had been transferred to Blackstone before Catalunya Banc´s sale.

Apart from the mortgage portfolio, BBVA also purchased around €8 billion in consumer loans and €3.2 billion in credits to SMEs showing default of 32%. Loans to big companies account for 14% of the portfolio and mark a 36% default. Developer debt totals to €1.1 billion.

Moreover, Catalunya Banc contains still performing REO assets worth of €1.1 billion with a 51% coverage.

Together with credit ballast, the entity has got two other debt portfolios worth of €28 billion, including Spanish public debt (€10.8 billion) and bonds issues by Sareb and MEDE (€12.4 billion).


Original article: ExpansiónPro (by M. Martínez, Jueves 24 de Julio 2014, pp 14)

Translation: AURA REE