The Pace of NPL Sales Falters in Spain

6 December 2019 – Spanish banks have reduced their pace of sales of NPLs this year, as CaixaBank, Sabadell, Bankia, Bankinter, Unicaja and Liberbank unloaded a total of just 4.9 billion euros in the first nine months of 2019. Those financial institutions wrapped up the quarter with €35.006 billion of such assets on their books, 12% less than at the beginning of the year. In contrast, Spain’s banks in sold off €90 billion in non-performing loans and REOs in 2018.

Standard & Poor’s, on the other hand, published a report in February estimating that Spain’s banks should rid themselves of €30 billion in NPLS between 2019 and 2020. That figure would have lowered their collective NPL ratio to below 4% compared to 7% at the time. Both S&P and Spain’s central bank also argued that the banks needed to increase the pace of sales to prepare for a potential slowdown in the economy.

Original Story: El Economista – Eva Díaz

Adaptation/Translation: Richard D. K. Turner


Cerberus and Tilden Park Each Look to Acquire Lezama Portfolio

4 December 2019 – Cerberus and Tilden Park are vying to acquire Kutxabank’s last large portfolio of bad debts. The two investment funds are looking to buy €400-million portfolio of non-performing loans, called Lezama. Kutxabank’s sale would put its NPL-ratio at less than 2.5%.

The acquisition would be Tilden Park’s first in the Spanish market. Josh Birnbau, a former executive at Goldman Sachs, founded the firm after he became famous for taking a large bet against sub-prime mortgages, one that earned his former company €2.277 billion.

Original Story: Eje Prime

Adaptation/Translation: Richard D. K. Turner

Spain’s Banks Look to Sell €19 Billion in Real Estate Assets and NPLs in 2019

21 October 2019 – Although the pace of sales has fallen in recent years, Spain’s banks are continuing their efforts to reduce their exposure to non-performing loans and foreclosed real estate assets left over from the financial crisis of the first half of this decade. In the year to date, those banks have sold portfolios of toxic assets worth a total of more than €7 billion. Another twelve other transactions worth approximately €11.7 billion, however, are on course to conclude by the end of this year.

Sabadell has been particularly active, having sold €2.55 billion in portfolios such as Greco and Rex. Unicaja and Ibercaja have also sold assets worth more than €1.5 billion. Santander is currently negotiating the sale of another two portfolios.

Spain’s financial institutions are expected to end the year with total sales of nearly €19 billion, compared to 41.7 billion euros last year, down by more than half.

Original Story: El Español – María Vega

Adaptation/Translation: Richard D. K. Turner

Santander to Sell Two Portfolios of Land and NPLs Worth Nearly €6 Billion

21 October 2019 – Santander is finalising plans to sell two major portfolios of NPLs and REOs, worth a total of approximately 6 billion euros. The bank has already contacted major potential investors to prepare themselves to analyse two portfolios: €2.7 in NPLs, called the Project Atlas, and another €3 billion in land.

Santander has been analysing the portfolios since the spring of this year. The bank is looking to increase the pace at which it is reducing its exposure to the Spanish real estate market. According to publicly available data, Santander had €12 billion worth of NPLs and another €10 billion in foreclosed properties as of June.

These would be the financial institution’s largest divestments since 2017, when it sold €30 billion in assets it had inherited from Banco Popular to Blackstone. Market sources believe that the bank will only finalise the sale during the first quarter of 2020, due to its size and complexity.

Original Story: El Confidencial – Jorge Zuloaga & Ruth Ugalde

Adaptation/Translation: Richard D. K. Turner

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