BMP News: Banks Recognize Necessity to Improve Relations With Developers

31/10/2014 – Expansion

Spanish banks assume that after the deep recession triggered by the real estate bubble burst, they should revise the relation with property developers and reduce risk as they understand they will both need the developers and international investors to offload their repossessed assets.

Directors of some of the leading Spanish entities, Santander, BBVA and Sabadell, weighted the relation up in context of the economic recovery during a session held at real estate fair trade Barcelona Meeting Point.

General director of Banco Sabadell, Miguel Montes, warned the banks ought to ‘choose well’ their future business partners as during the boom the market was flooded with amateurs.

Furthermore, real estate director of BBVA Agustin Vidal-Aragon admitted that currently banks are reluctant to lend to developers and this financing stays at the floor levels.

However, he pointed out that in order to avoid repeating errors from the past, the renewed relation will have to base on risk analysis.

Possibly, foreign investors will start financing land projects.

Also, CEO of Sareb, Jaime Echegoyen took the floor at the debate. He reminded that Spain’s bad bank collaborates with thousands of developers from all corners of Spain on quite close basis as they help it to shed the REO volume.

Santander’s delegate leading the Collection and Recovery department of the bank, Remigio Iglesias expressed cofidence on the fact that the opportunistic investors are being gradually replaced by long-term and local buyers.

Later on, representatives of the Community of Madrid, Catalonia and Sareb held private meetings with around 15-20 prime funds on possible ways out for the available assets in their balances.

Yesterday’s Barcelona Meeting Point programme included debate titled ‘Sovereign Wealth Funds: White Sharks or White Knights?’, during which vice-president of Drago Capital Gustavo Martinez Zamora gave his speech.


Original article: Expansión (after: EFE)

Translation: AURA REE