Tag: AHE

Bad Debt Ratios for Developers and Construction Companies Fall in June

4 October 2018

The non-performing loan ratio for credit granted to the real estate development fell to 11.3% in June, compared to 21.5% a year earlier, a low for the series. The total outstanding balance stood at 11.405 billion euros, according to data provided by the Spanish Mortgage Association (AHE).

The bad debt ratio for the construction sector also fell by more than ten points in one year, reaching 17.5% at the end of last June, with outstanding debts of €5.104 billion, though the index “remains at relatively high levels,” the AHE warned.

The improvement in the two indicators is largely due to the commitment of Spanish financial institutions to reducing the weight of bad debts on their balance sheets, which “is paying off,” the association announced.

“The favourable evolution of macroeconomic fundamentals, coupled with the intense dedication of the financial institutions regarding the restructuring and disinvestment of their portfolios of bad debts, suggests that we are entering a new phase, where a consolidation of growth and recovery seems increasingly evident,” the Spanish Mortgage Association added.

According to the AHE’s forecasts, improvements in capital ratios and the profitability of financial institutions as they reduce their exposure to the unproductive assets will allow them to increase commercial lending.

“It is to be expected that, at least in the medium term, loan activity will continue to be stimulated, and we will continue to see improvement to the financial system,” the AHE noted, recalling that the DBRS rating agency recently stated that Spain’s deposit institutions had reduced the weight of foreclosed assets from €83 billion in 2011 to €16.9 billion at the end of June, while the weight of non-performing assets was reduced from €232 billion to €75 billion.

Original Story: Europapress

Translation: Richard Turner

AHE: Listed Mortgage Securities Tripled In Q1 2016

30 June 2016 – Expansión

In total, the volume of mortgage-backed securities admitted for listing during the first quarter of the year amounted to €22,514 million. According to the Spanish Mortgage Association (‘Asociación Hipotecaria Española’ or AHE), that figure represents a more than three-fold increase in the quantity recorded during the same period in 2015 (€6,300 million). Single mortgage-backed bonds maintained their weight over the total volume issued, accounting for around 53%. The issued volume of that instrument amounted to €7,143 million during the first quarter, up by 13.4% compared to a year earlier.

The issuance of securitisations backed by mortgages between January and March 2016 amounted to €15,371 million, up by 51.6%. The outstanding balance of mortgage securities at the end of March registered a decrease of 5.5% with respect to the same period last year.

Original story: Expansión

Translation: Carmel Drake

The AHE Urges Banks To Sell Their Remaining RE Assets

12 June 2015 – Expansión

The Spanish Mortgage Association (‘Asociación Hipotecaria Española’ or AHE), whose members are all banks, believes that the sector must sell off its real estate portfolio so that it can, progressively, focus its resources on its core banking activity once more. According to the economic report issued by the General Assembly of the AHE, the real estate market is now showing its first signs of revival and recovery, after its “significant adjustment” since 2007.

Meanwhile, the trade association also analyses whether the recovery in mortgage lending is happening in the right way, after some bankers raised concerns. In this regard, the AHE notes that the recovery in terms of mortgages is positive, and so too is the competition between entities, as that is leading to lower prices, which is in turn facilitating access to credit for families. Nevertheless, the association draws attention to the fact that “we cannot highlight enough the importance of properly assessing the risks in order to avoid malfunctions such as those experienced in recent years”.

The risks are particularly high during periods of extraordinary economic stimuli and/or when interest rate curves flatten out.

Original story: Expansión (by M.R.)

Translation: Carmel Drake