Popular Earns €1,500m From Property Sales In 2014

19 January 2015 – El Economista

Banco Popular earned around €1,500 million from the sale of property in 2014, which represents a two-fold increase on the amount recorded in 2013 (€774 million), according to estimated figures released by the entity. In 2015, the bank expects to sell properties amounting to approximately €2,000 million, an increase of 33%.

Since the end of 2013, when the entity led by Ángel Ron sold the management of its real estate business to Värde Partners and Kennedy Wilson, the rate of sales has skyrocketed.

In fact, it reached a record high in the third quarter of 2014 despite seasonality, with sales of €391 million, compared with €240 million in the same period in 2013, an increase of 63%. Real estate arrears during this period amounted to 57.4%.

Between July and September, 80% of the properties sold were acquired by foreign customers and the remaining 20% were bought by domestic clients. By type of product, 55% of sales corresponded to finished properties and the remaining 45% related to land.

POPULAR (POP.MC) closed the first nine months of the year with cumulative sales of €989 million, equivalent to the sale of 5,148 units. Sources at the entity have explained to Europe Press that the majority of the bank’s properties are located in Andalucía (31%), Valencia (15.7%), Cataluña (12.2%) and Galicia (12.1%).

The CFO of Banco Popular, Francisco Sancha, revealed these sales forecasts during his speech at the “Spain Investor Day” forum, where he outlined the key aspects of the entity’s strategy and defended the profitability of its business model.

AGREEMENT WITH VÄRDE PARTNERS AND KENNEDY WILSON

In November 2013, Popular sold the management of its property business to Värde Partners and Kennedy Wilson for €800 million. This portfolio included loans relating to development and construction, as well as foreclosed real estate assets.

This transaction has allowed the bank to maximise the management of its real estate business and focus on the core activities that underpin its business model, namely, retail banking, and banking for SMEs and households.

Original story: El Economista

Translation: Carmel Drake

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