Sabadell Evaluates the Sale of its RE Arm Solvia

26 April 2018 – Intereconomía

Banco Sabadell is evaluating the sale of Solvia, its real estate subsidiary. There has been no shortage of offers given that Blackstone, Cerberus and Lone Star have all expressed their interest. The value of the company was €900 million in 2015, but that figure could now be higher due to the rise in market prices.

The CEO of Banco Sabadell, Jaime Guardiola, said during the presentation of results for the first quarter, where he announced that Sabadell had earned €259.3 million, up by 32.7%, that the entity has no “vocation” to dedicate itself to the real estate sector, but rather the banking sector, and so “when the time is right and an opportunity arises to create value”, the possibility of divesting Solvia will be assessed.

“Given the current coverage levels and the appetite that exists in the market, it is feasible to analyse an operation of this kind”, said Guardiola, who stressed, however, that “the time has not arrived yet”.

In fact, Banco Sabadell is immersed in a process to sell several portfolios of toxic real estate assets amounting to €10.8 billion in total, which will allow it, if expectations are met, to divest almost all of its problematic real estate inheritance, worth close to €14 billion at the end of 2017.

To remove these toxic assets from its balance sheet, most of which it inherited from Caja de Ahorros del Mediterráneo (CAM), the entity chaired by Josep Oliu has placed two portfolios of foreclosed assets on the market worth €7.5 billion.

Those portfolios join two others launched at the beginning of the year, worth €3.3 billion (one worth €900 million and the other worth €2.4 billion), and so Banco Sabadell is already sounding out the market to place packages worth €10.8 billion in total.

Jaime Guardiola, meanwhile, considers that the Spanish mortgage business “is very healthy” and that the delinquency levels “have been very well managed”. He adds that the new pipeline is being carried out in an optimal way, and so he rules out the possibility of the mistakes of the past that triggered the crisis being made again.

Original story: Intereconomía

Translation: Carmel Drake