Credit portfolios, recovery businesses, real estate divisions and now, the business in liquidation. The restructuring imposed by Brussels to the nationalized institutions – Bankia, NCG Banco and Catalunya Banc – has turned out to be a substantial business for foreign funds and banks. Some of these investors have met in the last few weeks showing an interest in the business being liquidated: credits, branches and staff.
If there are no last minute changes, the first serious offers will arrive in the next few weeks. A public tender cannot be dismissed in view of the growing interest.
These are potential operations that offer great advantages for both parties. The nationalized institutions can maintain part of their staff, avoid the economic and social cost of layoffs. The funds have the opportunity of acquiring credits and commercial and recovery teams at bargain prices, as well as some agreements on the provision of services.
The three bigger nationalized institutions are obliged by Brussels to reduce the credit volume in nearly 100.000 million Euros in the next few years (until 2017); its staff in more than 8000 workers; and its commercial network in more than 2000 branches. These cuts provide a business that the funds do not want to lose.
The reductions which interest the foreign investors most are the ones to be carried out in the expansion areas, entered by the savings banks in the last years of the real estate boom.
In the case of NCG Banco, the Galician institution has around 200 branches far away from the area considered strategic by Brussels. Nearly 120 of these belong to EVO Banco and would not be included in the type of operations sought by funds and 60 are included in the Management Unit of Single Assets (MUSA). The Galician group has received a lot of interest on this unit, which would also include 60 branches, 900 professionals and credits for 20.000 million Euros. Nevertheless, sources from the institution declare that their initial priority is to sell EVO Banco. Out of these 20.000 million Euros, half of them would be healthy credits and the other half default credits.
Some funds prefer to concentrate on the recovery teams and the default credit portfolios. They would then continue providing a recovery service to NCG Banco and they would acquire some of the default credit portfolios included in the unit MUSA.
Other funds are preparing offers for those healthy credits awarded outside the strategic region of NCG: Galicia, Leon and Asturias. Should these operations be closed, the acquirer would be in charge of managing the current credits, but would not grant further loans or deposits.
Along with NCG Banco, the funds and financial institutions are studying the possibility of acquiring part of the commercial network of Catalunya Banc. Brussels imposed the closure of 400 branches, 35% of all it had at the end of 2011. It also has the obligation of closing any business outside Catalonia and part of the one within the region, mainly in the provinces of Lerida and Gerona, according to financial sources.
Bankia has already closed the sale of non strategic assets. It has been done partly to save jobs, such as with the sale of Finanmadrid to Appollo, with the transfer of 124 people, or with Bankia Habitat, on sale with a staff of 500 employees. The troika has allowed Bankia to maintain part of its network in its natural area of influence. It was national since the very beginning, and therefore it will not need to leave any region. But Bankia still has to close 1100 branches and get rid of 4500 employees. The institution already has requests for early retirement buyouts for 3000 employees.