BBVA Reorganises Its “Bad Bank” After Key Director Leaves

6 June 2016 – Expansión

BBVA has put a new spin on the organisation of its bad bank. The entity chaired by Francisco González recently announced the disappearance of its problem assets division – Non Performing Assets – after agreeing the departure of its main Director and dividing up its functions between two other divisions, according to financial sources.

The Spanish group already reconfigured the division just over two years ago. Then, it handed over the task of accelerating the sale of problem assets to Pedro Urresti (pictured above), the Director who has now just left the entity as part of the reorganisation.

Urresti joined BBVA in 2006 from JPMorgan, where he had been responsible for Capital Markets in Spain and Portugal. At BBVA, where he replaced Carlos Pertego – the current Director of Goldman Sachs – he led the Financial Management and Investor Relations department until 2011, when González put him in charge of problem assets.

Following the dissolution of that area and the departure of Urresti, BBVA has chosen to divide its functions and share them out between two divisions. On the one hand, everything relating to real estate assets will be transferred to BBVA Real Estate – the unit in which Anida sits – led by Agustín Vidal-Aragón. On the other hand, the activity relating to the sale of debt portfolios will be transferred to Javier Rodríguez Soler, the bank’s Director of Strategy and M&A.

Reinforcement

Rodríguez Soler was one of the Directors who’s profile increased following the reorganisation of the management team performed by González last year, when he appointed Carlos Torres as the new CEO, to replace Ángel Cano. The Head of M&A, who until then had reported to the Finance Director, Jaime Sáenz de Tejada, went on to lead his own division, reporting directly to the President.

As a result of the new changes, BBVA hopes to accelerate the sale of its real estate assets, whose balance barely decreased last year, due to the takeover of Catalunya Banc.

During the two and a half years that Urresti has been in charge of the problem assets division, BBVA has been one of the least active large Spanish entities in the sale of portfolios, and has barely transferred any portfolios of loans or homes.

Meanwhile, other financial groups such as CaixaBank, Sabadell and Bankia have taken advantage of the improvement in the market to sell €17,000 million worth of non-strategic assets.

Furthermore, the entity has not sought to make any alliances in the sector through the sale of part or all of its real estate arm, like other entities did, including Santander, CaixaBank, Bankia, Sabadell and Popular, amongst others. It did consider selling off its collections business and it appointed KPMG to coordinate that sale, but it ended up pulling out.

According to financial sources, this strategy means that the sales rate of its real estate assets is slower, but the bank would benefit in the event of a faster than expected economic recovery, as it would obtain more in return for its properties and real estate collateral. Nevertheless, the risk still exists that the opposite may happen.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

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