30 October 2017 – Voz Pópuli
Banco Santander does not want to stand idly by following the sale of Banco Popular’s real estate. After the completion of that operation (the largest ever real estate transfer in Spain), the entity chaired by Ana Botín wants to continue accelerating its real estate clean up. In this way, it plans to reduce its real estate exposure by more than €6,000 million over the next year.
That would mean that Santander’s real estate balance would decrease by half, given that it currently amounts to around €12,300 million in gross terms (excluding provisions).
According to the bank’s CEO, José Antonio Álvarez, speaking at the results presentation, the objective is for the entity’s real estate exposure “to be immaterial” by the end of 2018.
This immateriality means having a net balance of between €1,000 million and €2,000 million left on the balance sheet within 14 months, besides the rental properties, explained the banker. That, in turn, means selling around €6,000 million (in gross terms) and leaving around €6,000 million on the balance sheet.
In this way, Santander España’s net exposure to the real estate market is €5,900 million. The entity has an average coverage ratio of 52% over these assets, which means that their gross value is €12,300 million.
Of those €5,900 million, €3,372 million are foreclosed assets, €1,203 million are rental properties and €1,325 million are delinquent real estate loans.
In August, Santander agreed to transfer almost €30,000 million (in gross terms) of Popular’s property to Blackstone. Specifically, the bank sold 51% of a new real estate company, for €5,100 million and retained ownership of the remaining stake.
In terms of the rest of the real estate assets on its balance sheet, Santander could undertake similar operations, although it will also continue to analyse sales through the retail network and the option of putting properties on the market through Socimis. Both the Spanish bank and its competitors are under pressure from the ECB to get rid of the real estate on their balance sheets as soon as possible.
Meanwhile, Santander is negotiating with Värde Partners, owner of 51% of WiZink, to repurchase Banco Popular’s customer card business and to sell it Barclays and Citi’s business in return.
Original story: Voz Pópuli (by Jorge Zuloaga)
Translation: Carmel Drake