Banks are great real estate companies. The managing subsidiaries of their properties are the Spanish companies which sell more homes, much more than any real estate company. So, Santander, BBVA, Popular, Sabadell and La Caixa, the great non nationalized banks that share most of the banking business in Spain after the concentration experienced by the sector have been able to sell 32971 properties in the first half of the year.
All institutions are fairly happy with the behavior of their real estate subsidiaries. (…) La Caixa leads the sales of properties with a total of 9189 registered operations; Banco Santander follows closely, with 8300 sales; Sabadell with 7747; BBVA with 6617, and finally Banco Popular, with 1065 transactions.
Nothing at all like the 847 operations processed by RedPiso, for instance, or the 600 sold by Gilmar Grupo Inmobiliario, both located in Madrid and two of the biggest real estate companies nowadays. Both, however, value their year as a good one and improve their figures from the previous year. But banks play with their two secret weapons: an always negotiable price and a cheaper financing for their properties.
When organizing their real estate assets, these five institutions have evolved in a similar way: they have created a “perimeter” in the form of a subsidiary or internal “bad bank”, where they gather all their awarded assets – foreclosures and assignment in payment – and credits to developers. They have also separated the management of these assets in separate subsidiaries, that is, the commercial machinery to sell them, and in some cases, they are even thinking of selling that managing company.
Also they all inform about the units that exit their balance and not about those entering their books. They do not detail how many of these properties are garages, storage rooms, homes, land or trade premises. Nor do they inform about the price or the discount applied.
For banks, the other side of the story is the number of assets that enter their balance – which is growing -, the loss of value that needs to be applied to these assets and the provisions that need to be done. During the first half of the year, all institutions have chosen to increase the awarded assets in their balances and to reduce the exposure to the developing sector, accepting assignments in payment and reductions of value of their portfolio.
At the end of the first half of the year, the net value – subtracting the provisions that have been made – of the portfolios of awarded properties of the five banks reached 22041 million Euros.
According to the institutions, the number of confiscated properties in the hands of BBVA (6081 net million Euros) and La Caixa (6160) were the highest ones, followed by Santander (3618), Sabadell (3320) and Popular (2862).