Sabadell Lowers Its 20-Year Fixed Rate Mortgage To 2.90%

3 March 2015 – Expansión

Banco Sabadell has reaffirmed its commitment to fixed rate mortgages. The bank chaired by Josep Oliu has decided to convert its fixed rate mortgages into its star home loan product, and it will therefore recommend that its clients opt for fixed rate products to ensure the stability of their mortgage payments over the long-term. 16% of the bank’s new mortgages are now fixed rate, compared with 10% in 2014.

To demonstrate its commitment, Sabadell has just reduced the interest rate on its 20-year fixed rate mortgage from 3.7% to 2.90%. If the client prefers a 30-year term, a fixed rate of 3.10% will apply.


During the real estate boom, people paid rates of up to 4.75% when Euribor was at 4.1% in 2007.


Other entities, such as Bankinter, Bankia and BMN are also backing fixed rate mortgages, offering interest rates of between 3.4% and 4.60%. CaixaBank offers a rate of between 2.5% and 3%, depending on the degree of connection (of the client with the bank’s other products).

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake

Solvia Will Take Over Management Of Ceiss’s Assets From Next Week

26 February 2015 – Expansión

From next week, Solvia, the real estate arm of Banco Sabadell, will gradually incorporate assets from Sareb, the so-called bad bank, into its managament portfolio. Specifically, it will take over the management of assets that were originally held by Banco Ceiss.

In November last year, the Asset Managament Company for Bank Restructurings (Sareb) awarded Solvia, the real estate arm and recovery platform of Banco Sabadell, the management of a portfolio of 42,900 assets that had been originally held by Bankia, Banco Gallego and Banco Ceiss.

In total, 7,000 assets were held by Banco Ceiss; they will be added to those from Banco Gallego that Solvia is already managing. Only the management of the assets originally held by Bankia will remain pending; and that is expected to happen within the next few months”, according to Solvia.

Original story: Expansión

Translation: Carmel Drake

RE Managers Ranking: Solvia & Anida Vie With Vulture Funds

25 February 2015 – El Confidencial

Banco Sabadell and its real estate arm Solvia have infiltrated the top ranking of (Spain’s) real estate managers, which mainly includes vulture funds. These funds now have (assets under management amounting to) €278,000 million.

The international funds have consolidated their position as the new players in the real estate sector after Sareb’s latest auction. In fact, together, the so-called vulture funds control a portfolio of assets amounting to more than €278,000 million, including land; properties; and mortgage and developer debt. There are some important exceptions (in the ranking), such as Solvia (Banco Sabadell) and Anida (BBVA), but the top positions are held by institutional investors such as TPG (Servihabitat), Cerberus (Haya Real Estate) and Apollo (Altamira), who monopolise the sector.

Following the bid for Sareb’s assets, the largest manager or servicer is Servihabitat, owned by Caixabank (51%) and the US fund TPG (49%). In total, the company manages €58,698 million, having taken on €19,725 million from Sareb. The entity was already ranked first or second-place, depending on whether the loans in its portfolio were included in the calculations, rather than just the properties.

Since the start of the year, Servihabitat has controlled 21% of the assets of the so-called servicers, including properties and loans. Following the auction, it now also manages assets of Nova Caixa Galicia, Liberbank and Banco de Valencia. This hegemony has been thanks to Sareb’s most recent auction, which was held less than two months ago, which awarded portfolios amounting to €41,200 million. The assets (awarded in that auction) have been managed by the winning companies since 1 January 2015.

The main upset (in the rankings) has been Banco Sabadell and its real estate arm Solvia, which has infiltrated the ranking of the top property managers in Spain. The bank was one of the few that did not sell its real estate portfolio to the vulture funds, like most of its competitors did, and as a result, it has become the fourth largest entity in the (servicing) sector, a surprise gate-crasher to the party, with assets of €39,765 million. Of this amount, €17,187 million came from the most recent auction, in the form of assets that came from Bankia. 43% of the assets that Solvia now manages came from Sareb. It has a 13% share of that market.

Off the podium

In this sense, another important development is that of Apollo. Previously it was the sixth largest player. Now, following the auction and its purchase of Altamira from Banco Santander for €700 million at the end of 2013, it has risen to third place. This bronze medal position reflects the fact that Altamira-Apollo now manages €46,566 million. It has acquired more than half of its property and loan (€26,056 million) from Sareb. The entity has a 17% share of Sareb’s market.

These increases have been achieved at the expense of another operator, Anida, which has dropped down the rankings to fifth place. Anida is the real estate arm of BBVA and has more than €25,000 million assets under management. It is one of only a handful of companies of this type, which, like Solvia, has not allowed foreign funds to participate in its capital. Neither Anida nor Aliseda, which was sold by Banco Popular to Värde Partners and Kennedy Wilson for €815 million, participated in the most recent auction and so they lost size in a business where critical mass is fundamental.

Haya Real Estate, owned by Cerberus, is still the entity that depends most heavily on the Sareb. It controls assets that mainly come from Bankia and so 65% of its portfolio depends on the Sareb contract, much more than Altamira (55%) and Solvia (43%).

By contrast, from all of the large players, Servihabitat is the one that is least dependent on the bad bank, despite having won some of the lots it has auctioned, since it already had a significant asset base. It depends on Sareb for 33% of its portfolio only, which means, on paper, that it should have a higher operating management margin than its closest competitors.

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

CNMC Authorises Santander’s Purchase Of Bankia’s 19% Stake In Metrovacesa

13 February 2015 – Expansión

With this purchase, Santander will assume ownership of 55.8% of the share capital, whereby taking control of the real estate company.

Santander has received authorisation from the National Markets and Competition Commission (Comisión Nacional de los Mercados y la Competencia or CNMC) to purchase Bankia’s 19% stake in Metrovacesa and whereby assume control of the property company, by taking ownership of 55.8% of its share capital.

The ‘super regulator’ has authorised the first phase of the operation, which is not deemed to generate any competition concerns, according to the records of the body.

At the beginning of December, Santander agreed to buy the 19% stake that Bankia, the nationalised bank, holds in Metrovacesa for €100 million.

Thus, by virtue of the transaction, the bank chaired by Ana Patricia Botín takes control of the real estate company and Bankia fulfils a new milestone in its plan to divest its industrial holdings, and also records a profit of €13 million as a result.

After Santander, the other shareholders in Metrovacesa are BBVA, with an 18.3% stake, Banco Sabadell (13%) and Banco Popular (12.6%).

The Sanahuja family

The company has been controlled by the aforementioned financial institutions since February 2009, when they foreclosed the debt held by the Sanahuja family, the then controlling shareholder of the company.

For Metrovacesa, which was delisted from the stock exchange in May 2013, the takeover by Santander represents a new phase in its share ownership.

The real estate company, which was once controlled by BBVA, was acquired from that entity in 2004 through a takeover bid (oferta pública de adquisición or OPA) by Bami, the company owned by Joaquín Rivero. Subsequently, the company was the subject of a ‘takeover war’ between the businessman and the Sanahuja family, but eventually the banks took control.

Metrovacesa is dedicated to the rental of real estate assets. Its portfolio includes buildings covering more than 1.1 million square metres, comprising offices, shopping centres and hotels, which are mainly located in Madrid and Barcelona. Amongst others, it is the owner of the iconic Torre Madrid in Plaza de España in Madrid, which will soon house a hotel to be operated by the Barceló chain.

Original story: Expansión

Translation: Carmel Drake

Spanish Banks’ Q4 Results Show Demand For Loans Picking Up

2 February 2015 – WSJ

Two Spanish lenders, Caixabank SA and Banco Popular Español SA, reported fourth-quarter results on Friday that showed an uptick in demand for loans as the country chugs toward economic recovery.

Caixabank and Banco Popular said new loans were up in the fourth quarter compared with a year earlier, led by demand from businesses in particular, while mortgage lending was less vibrant. That trend was in line with results reported on Thursday by Banco de Sabadell SA.

Still, an increase in loan issuance wasn’t enough to offset the wave of individuals and businesses that are focused on paying down their existing debts, rather than taking on new debt. The amount Caixabank lent to customers in 2014 fell nearly 5% compared with the previous year and 0.5% at Banco Popular during the same period.

Caixabank Chief Executive Gonzalo Gortázar said new loan production in 2015, particularly to businesses, is likely to be strong enough to outpace the rate at which borrowers are paying off debts. Caixabank is likely to see its total loan portfolio grow around 7% in 2015, Mr. Gortázar said at a news conference, buoyed by the acquisition of Barclays PLC’s retail banking division in Spain, which closed on Jan. 2.

“Credit is returning to the economy,” Mr. Gortázar said. “New loan production is accelerating each quarter.”

Overall in the Spanish banking system, he said, total loan volumes should stop declining and stabilize around zero or 1%.

Sabadell executives said Thursday they anticipated a turnaround this year at their bank as well, with growth in the total loan book of around 1%-2% thanks to an increase in loans to small and medium-size businesses.

The “deleveraging” process in Spain has weakened lenders’ returns in recent quarters and makes analysts anxious about future growth. But bank executives acknowledge that it is healthy for individuals and businesses in Spain to slough off layers of debt accumulated during a frenzied building boom, which went bust starting in 2008 and sunk the country into several years of recession.

Caixabank reported net profit of €154 million ($174.3 million) in the fourth quarter of 2014. The bank said it had restated its 2013 accounts because of a contribution to Spain’s deposit guarantee fund, leading to a €142 million loss in the fourth quarter of 2013.

The Barcelona-based bank said fourth-quarter net interest income was €1.08 billion compared with €1.02 billion a year earlier. That was in line with analysts’ expectations.

Caixabank shares were down 2% in early afternoon trading in Madrid. Credit Suisse Group AG analysts said in a research report that the bank’s results were “mixed,” with weak trading income and higher-than expected impairments, including €195 million of early retirement charges.

Banco Popular, Spain’s sixth largest bank by market value, reported net profit of €99.4 million ($112.5 million) in the fourth quarter of 2014, up from €79.6 million a year earlier. The bank said fourth-quarter net interest income was €570.9 million compared with €581.5 million a year earlier. Banco Popular shares were up 0.7%.

Net interest income, a key driver of revenue for retail banks like Caixabank, is the difference between how much a bank earns on clients’ loans and how much it pays clients for their deposits.

Separately, Bankia SA has postponed its 2014 annual results presentation while Spain’s bank-bailout fund, known as Frob, weighs how potential litigation expenses should be divided between the bailed-out bank and its parent company, a Bankia spokesman said Friday.

Bankia, which Spain spent €22.4 billion in European Union funds to clean up in 2012 following a real-estate bust, was set to report earnings on Feb. 2.

Spain’s bank-bailout fund Frob still owns the majority of Bankia. The bailed-out bank, Spain’s fourth-largest by market value, is plagued by lawsuits triggered by fraud allegations related to its 2011 initial public offering. Investors in the IPO suffered steep losses when Bankia was later nationalized. Executives at Bankia at the time say the share sale was above board.

The Bankia spokesman said it is unclear when the bank’s 2014 results will be rescheduled.

Original story: WSJ (by Jeannette Neumann)

Edited by: Carmel Drake

Sabadell Puts €250m NPL Portfolio Up For Sale

29 January 2015 – Expansión

Opportunistic funds / “Project Cadi” includes non-performing loans that the entity once granted to real estate developers

Banco Sabadell is making progress in its strategy to reduce the volume of foreclosed assets and bad debt on its books. The financial group led by Josep Oliu, which today releases its results for 2014, has just put an NPL portfolio worth €250 million up for sale.

According to market sources, the so-called Project Cadi includes non-performing loans that were once granted to real estate developers. Through Solvia, Sabadell is taking a very active role in packaging these types of loans, in the face of strong buyer interest from opportunistic funds that are now active in the Spanish market. At the beginning of the month, the bank already disposed of another portfolio worth €435 million (Project Tritón), which included 630 non-performing loans to small- and medium-sized developers, as well as 700 foreclosed assets in Valencia, Andalucía, Cataluña and the Balearic Islands. This sale was put together through a bond issue, acquired by Deutsche Bank and Hipoges. Sabadell may already be sounding out the market with a view to selling other portfolios over the next few months.

This type of transaction reflects the confidence that funds have in the recovery of the real estate market in Spain. In parallel, banks are interested in this kind of transaction because they lighten their balance sheets and allow them to generate income from assets that are no longer productive and that have already been provisioned. According to sector sources, these transactions are closed with discounts of around 75%, which means that the funds are paying the financial institutions 25% of the nominal value of the loans.

The largest transaction of this kind in Spain was closed in 2014 by Blackstone, which acquired a €6,392 million mortgage portfolio from Catalunya Banc. Lone Star and JP Morgan also bought loans from Eurohypo amounting to €4,500 million. Other funds that have acquired portfolios include Aiqon, Lindorff, Cerberus and Starwood.

Original story: Expansión (by S. Saborit and J. Zuloaga)

Translation: Carmel Drake

Sabadell Enters Mortgage War With 20-Yr 3.7% Fixed Rate Offer

16 January 2015 – Expansión

NEW PLAYER / The bank led by Josep Oliu breaks into the mortgage market with a fixed rate loan, as it seeks to revitalise these kinds of operation, which currently have little prevalence.

The war for new mortgages, unleashed on the domestic market in recent weeks, has a new player: Banco Sabadell has decided to enter the fray to increase its market share of new business. And, in addition to offering a competitive variable rate product, it is also inviting customers to take out mortgages with rates that are fixed over the life of the loan, under terms clearly undercut those currently offered by other banks.

The entity led by Josep Oliu finally approved the launch of a fixed rate mortgage product a few days ago; the rate varies depending on the term of the loan. It begins at 3.5% for loans with a 15-year repayment period and increases up to 3.95% for 30-year operations. In between, a rate of 3.7% will apply for 20-year loans and 3.9% for 25-year terms. An arrangement fee of 1% will apply to all loans and their approval will require borrowers to register their payroll and take out a life insurance policy with the entity.

Better conditions

These conditions compare favourably to those offered by other entities, such as Bankinter (4.94% over 15 years), Caixabank (between 5.5% and 6.95% for operations over 25 years) and Kutxabank (3.98% over 20 years). The arrangement fees vary in each case, but all of the entities require borrowers to register their payroll and take out insurance.

The supply of fixed rate mortgages is currently very limited because entities consider that the interest rate risk that they face over the medium-long term is excessive.

But Management at Sabadell believe that low interest rates are going to be with us for some time to come and that in any case, it does not seem that inflationary pressures are going to lead to an excessive increase in the price of money any time soon. As a result, they believe that they can offer fixed rates for the time being, provided those rates reflect the terms of the loans. Such products may be attractive for those wishing to purchase a home since they guarantee the mortgage repayment amount for the whole life of the loan.

Sabadell is not going to market this type of mortgage exclusively; it wants to enter the wider battle for new mortgages (both fixed- and variable-rate) and intends to engage the tennis player Rafa Nadal, with whom the entity has a marketing contract, as a lure to get closer to its customers. This will be the first campaign in which Nadal participates after signing a contract with the entity last year.

The bank has not set a specific target for its fixed-rate mortgages, but it has fixed an internal goal for the signing of new operations: it wants to achieve growth of 40% on its 2014 figures. In absolute terms, that may not represent a very significant number (the bank has not published its results from last year yet) given that the starting point is relatively low. But it is important qualitatively, since it implies that the bank believes that mortgages are making a come back.

Original story: Expansión (by Salvador Arancibia)

Translation: Carmel Drake

Husa Negotiates With Investors To Overcome Insolvency

29/12/2014 – Expansión

The Husa hotel chain is holding talks with several investors to try to get a partner to inject liquidity and lift it out of the bankruptcy proceedings to which it has been subjected since February, according to Europa Press’s inside sources linked to the proceedings.

Predicted by the incumbent judge of the Commercial Court No. 3 of Barcelona, José María Fernández Seijo, the regular phase of the bankruptcy proceeding will be complete in early January, after which the company must submit an agreement proposal with its creditors.

The Hostelería Unida insolvency proceeding — which brings together a great number of companies from the Husa group — was announced on February 11th, and nine more companies have been added since then.

The group has sold some hotels or transferred profitable business units, including the iconic Hotel Palace in Barcelona, which was transferred to owners who have taken over the management of the establishment and all the employees. The group has also reduced its workforce of about 500 employees to about 200 currently.

According to the report of the insolvency administration, submitted in late October when there were still only six companies in state of insolvency, the group’s negative shareholders’ equity amounted to € 153 million — the difference between its € 68.5 million of consolidated assets and 221.8 of accumulated total liabilities. Administrators had, nonetheless, already predicted that this figure could exceed 200 million due to the likelihood of adding other companies into the proceedings.

Of the group’s debt of 221.8 million euros, 40.2% correspond to public credit–primarily from the Tax Agency and Social Security Servicе; 26.4% to financial creditors–the main ones being CaixaBank and Banco Sabadell; and the remaining 31.3% to general creditors.

Hostelería Unida accounts for the greater chunk of the negative stockholders’ equity – 115.7 million euros, as it has assets worth only 34.7 million euros and liabilities amounting to 150.4 million.

Original article: Expansión (by Europa Press)

Translation: Aura REE