26 March 2018
Unicaja, the Malaga-based bank, is accelerating its sale of the real estate assets it was forced to take on during the financial crisis. Last year it sold a portfolio of land, reducing its holdings of foreclosed assets by one hundred million euros, and reported a gross profit, due to the transaction, of 20 million euros, according to a report.
In addition, Unicaja reached an agreement last year with the Norwegian fund Axactor to create two joint ventures and de-consolidate more than 4,000 foreclosed assets (in lieu of debt payments) valued at €252 million. The Nordic fund paid Unicaja between 150 million and 200 million euros in the transaction, according to knowledgeable sources. One of these companies will take control of 3,035 of Unicaja’s foreclosed assets, and the other will take on a further 1,034 foreclosed assets from España Duero. Axactor will control 75% of both, while the remaining 25% remain with the Unicaja group.
Unicaja’s real estate management platform, called GIA, will manage the properties. The majority are located in Andalusia and Castilla y León, where the two institutions are based.
The transaction has not had a significant impact on its financial statements, according to the report.
In total, the Unicaja group, including its subsidiary España Duero, reduced its volume of unproductive assets by 21% last year. In absolute terms, €1.201 billion in toxic assets left its balance sheet. Such loans to developers and real estate assets generate many expenses and no income, reducing profitability.
Unicaja earned 138 million euros last year, 2.5% more than in 2016. The level of balance sheet provisions related to real estate stands at 64%, one of the highest in the sector. Its delinquency rate stands at 8.7%.
The bank has a market value of €2.225 billion. Investors who took part in its IPO in June 2017 have seen their initial investment go up by 23% in nine months.
Original Story: ProOrbyt Expansion – R. Lander / R. Sampedro
Translation: Richard Turner