ING España’s Mortgage Portfolio Increased By 5% In 2014

12 February 2015 – Expansión

ING Direct España increased its client portfolio and balance sheet again last year. The bank was the only entity that managed to increase its mortgage book, with an increase of 5.1% to €9,949 million. It is offering one of the best mortgages in the market, having lowered its spread over Euribor to 1.49%.

The growth in its portfolio of other loans was even more significant; it rose by 29.7% to €961 million. ING Direct launched a new strategy in September 2013 to gain a foothold in the SME segment. As a result, its balance sheet increased by 12.3% to €25,277 million in 2014, whilst its funds and pension plans soared by 45.8% to €4,148 million. Its client portfolio in Spain grew by 7.3% to 3.1 million.

Despite these figures, ING Direct España’s bottom line for the year is unknown, since the Dutch entity does not provide a breakdown of its gains and losses by country.

At the global level, the group made a profit of €1,251 million in 2014, down by 64.7% due to extraordinary items and a change in the perimeter. Excluding the impact of extraordinary items, its net profit amounted to €3,424 million, i.e. 8.5% more than in 2013.

ING finished paying back the aid it received during the crisis (€10,000 million) in 2014, and so it announced yesterday that it will begin paying dividends to shareholders again, with the first payment of €0.12 per share being disbursed in May. Yesterday, ING’s shares increased by 3.62% to €11.62.

Original story: Expansión (by M. Romani)

Translation: Carmel Drake

Sareb Will Issue €10,189m In Senior Notes On 9 Feb

30 January 2015 – Expansión

On 9 February, the Asset Management Company for Bank Restructurings (Sareb) will issue two sets of senior bonds amounting to €10,188.8 million in total, according to the Official Bulletin of the Commercial Registry (BORME) published today.

In its first appeal to the market this year, Sareb will make two issues, one amounting to €4,084.7 million and the other amounting to €6,104.1 million.

In both cases, the nominal value of the bonds will be €100,000 each and the interest rate will be three-month Euribor plus a spread.

The subscription period, for both issues, will run from 12:00 until 14:00 on 13 February and will terminate on 28 February.

Original story: Expansión

Translation: Carmel Drake

Strong Pound Makes Spanish Property More Attractive To UK Buyers

26 January 2015 – Murcia Today

Tourism in Spain could also benefit from the weakness of the euro.

Following the announcement on Thursday that the European Central Bank is to inject at least 1.1 trillion euros into the economy of the Eurozone, the reaction on the international currency markets has been to invest in sterling and the US dollar, pushing the UK pound to its highest level against the euro for seven years.

By midday on Friday, one pound was worth 1.34 euros, although it dropped back to 1.31 by close of trading on Friday, meaning that pound-holders’ purchasing power in Spain has increased by 5% since 1 January and by 12% since April last year. At the same time, the euro fell to its lowest rate in eleven years against the dollar.

How the ECB’s “quantitative easing” policy will affect the Spanish economy as a whole will become clear over the next two years, but in the short term, the relative strength of the pound could have two very important consequences.

One of these is that over a short period of time, property in Spain has suddenly become significantly cheaper for buyers from the UK, and it is not unreasonable to imagine that demand may suddenly increase from British buyers in a market which, at least on the Mediterranean coast, already relies heavily on buyers from outside Spain. Coupled with low interest rates, the greater value of the pound means that for most UK nationals, property in Spain is now more affordable than it has been for many years.

At the same time, in a week in which some of the final figures for 2014 in Spain’s tourist sector have been made public, the greater purchasing power of UK residents could lead to further increases in tourist spending by visitors to Spain from the UK after record numbers of foreign visitors came here last year. Flight prices may come down slightly in response to falling fuel costs, and for those whose disposable income is in sterling, visiting Spain and other Eurozone countries is now less of a strain on the pocket than it was a year ago.

It is also good news for those looking to buy property for the first time: Euribor dropped to a record low making borrowing cheaper than ever.

Of course, on the face of it, the fall in the euro is not necessarily good news for Spain, but if the ECB’s intention is to stimulate economic growth in the Eurozone, then the property and tourist sectors of the Spanish economy may be among the first to benefit.

Original story: Murcia Today

Edited by: Carmel Drake

Banco Popular Launches New Mortgage

20 January 2015 – El Mundo

Banco Popular has launched its new mortgage offer into the market, with spreads of around 1.5% for both its branch network and online subsidiary, Oficina Directa. The entity is offering the Hipoteca Premium in all of its branches, with a spread of 1.59% above Euribor. The product has a fixed interest rate of 2.4% for the first year.

Original story: El Mundo

Translation: Carmel Drake

Mortgages To Become €140 Cheaper Per Year On Average

02/01/2015 – Cinco Días

The Euribor, which is the reference rate for most Spanish mortgages, has closed 2014 at a record low of 0.329% and will bring the price of mortgages down some 140 euros per year.

The Euribor began to drop months ago and has arrived at the end of December with a daily rate of 0.325%. So, it has ended the year at a record low of 0.329%, which is 0.214 points fewer than it was in December last year.

XTB analyst Miguel Antonio Marcos has said that 2014 was a “historic” year for the Euribor, since it has managed to set one record low after another since the beginning of the year.

“The fall in inflation and the slowing down of the European economy have come to an end, leading to an unprecedented performance in Europe: the application of unconventional monetary policy by the European Central Bank (ECB),” he told Europa Press.

Marcos indicated that these measures have been reflected in bond markets and in the rate of the Euribor, which started the year in the vicinity of 0.55% and ended the year at below 0.33%, registering a 40% drop. “A really positive year for Spanish mortgage holders,” he added.

Thus, Marcos estimated that the reduction of the rate over the last month will lead to “a slight relief” for mortgage holders who have to review their mortgages during the month of January.

“In principle, we think that the situation is not changing much, but we can not forget that the Euribor traded above 5% in the years before the crisis,” he stated.

Favorable Outlook for 2015

For the next year, the XTB analyst assures that everything leads us to think that the monetary policy carried out by the European Central Bank (ECB) will continue.

“With the economic situation in Europe failing to give definite signs of recovery and with inflation increasingly closer to zero, it appears that the Euribor will not be a problem for mortgage holders,” said Marcos.

In this regard, he said that the most likely scenario is for the 12-month Euribor to be in the region of 0.30%, “as cause and consequence of a new attempt by European bodies to circulate credit, reduce unemployment and make the economy in the ‘Old Continent’ grow at reasonable rates.”

Original article: Cinco Días (by EFE)

Translation: Aura REE

Mortgage Resurrection Continues In October: Up 18%

24/12/2014 – Cinco Dias

The signing of new mortgages for home purchase rose 18% in October, for the fifth consecutive month in comparison to last year; although the increase was lower than in the previous month, which was 29.8%.

According to provisional data published today by the National Institute of Statistics (INE), last October, 17,687 new mortgages were signed to buy homes, compared to 19,323 signed in the previous month, marking a monthly drop of 8.5%

Also, the total cost of these loans stood at around €1.766 billion in October, nearly 15% up from last year and 15.2% less from the previous month.

Meanwhile, the average amount of mortgages went back down to 100,000 EUR and stood at 99,866 EUR in late October, which is 7.4% less than in the previous month and 2.6% less than in the same month in 2013, according to the INE.

92.8% of the mortgages signed in October use a variable interest rate, compared to 7.2% that use a fixed rate. The euribor is the most common reference in constituting variable interest rate mortgages, specifically in 89.7% of new contracts.

The average interest rate at the beginning of the mortgage for the total number of properties is 3.78%, while the average time is 21 years. The average interest rate, at the beginning, for the mortgages on residential property is 3.6 percentage points, 14.1% lower than in October 2013.

Original article: Cinco Dias

Translation by: Aura REE

Euribor + 1% Is Already Here

18/11/2014 – El Mundo

In their run to win more borrowers and clients, banks turn the screw on differentials even more. One of them, Kutxabank, has slashed its IRD from 4% in mid-2013 to a staggering 1%. Such a low interest rate has not been seen in years and it is even smaller than the super-low CajaSur’s 1.25% offered since the end of 2013.

According to the Basque entity, the alluring differential (applied after the first year of loan) has no fixed requirements and is highly personalized. Although access to the Euribor + 1% rate can be reached through many combinations, it involves purchase of quite a few loyalty products.

Precisely, the lowest differential on the market is available as soon as the following fulfilled: all borrowers’ salaries deposited, shopping done with use of debit or credit card for at least 4.800 euros annually, home and life policies (minimum 150.000 euros) taken out, and the Voluntary Social Welfare Entity (EPSV) contribution or a pension scheme of 2.000 euros per year paid.

Founder of financial product price comparison website HelpMyCash.com Olivia Feldman considers the importance of the differential at the moment of chosing a mortgage. ‘The difference between an Euribor +1.5% and an Euribor +2% could be translated into 50-euro savings monthly and into more than 10.000-euro during the loan’s lifetime’, she said while analyzing a case of a 150.000 euro loan for 25 years and discounting the Euribor will stay at 0.36%.

‘However’, remarks Feldman, ‘the customer shall not stop at the IRD but look beyond it, at the compensation. It is normal that banks choses the salary deposit and two insurances but if they also demand, for example, an unemployment insurance or a pension scheme, the deal may turn out expensive’.

Olivia Feldman also puts emphasis on the number of mortgage-comparison searches on her website which increased as a result of the mortgage war among Spanish banks. She does not rule out further cuts in IRD in 2015.

Another expert, Gonzalo Bernardos, head of the University of Barcelona’s Real Estate department hopes the Euribor+1% won’t provoke further cuts in IRD. ‘This level is still acceptable but going below it would be a real blunder’, he comments on the matter. In his opinion, these mortgages do not bring profits to banks but they do provide them with greater market shares and an extreme loyalty on the part of customers.

Bernardos calculates that a bank must pay around 0.3% for management of a mortgage or, in the best case, 0.1%-0.2% over the amount borrowed. Therefore, he believes this kind of loans will be granted to medium- and high-class customers to avoid insolvency issues.

 

Original article: El Mundo (by Jorge Salido Cobo)

Translation: AURA REE

New Euro Interbank Offered Rate: ‘Euribor Plus’

31/10/2014 – Cinco Dias

The scandals about manipulation of the Euribor which involved such large banks as Société Générale, Deutsche Bank or RBS, made the European Commission work on creation of a new rate that would replace the current one and become the reference in the future.

Named ‘the Euribor Plus’, the new Euro Interbank Offered Rate will be designed in cooperation with four Spanish entites: BBVA, Santander, CaixaBank and CecaBank.

Euribor provides the basis for the price and interest rates of all kinds of financial products and mostly mortgages. In Spain, more than 80% of loans for home purchase employs the rate as a reference.

The index is an average of reference rates sent by 25 eurozone banks on daily basis. This means that the result is not the real rate applied on loans but banks’ expectations. Therefore, to avoid possible fiddling with the rate, the Euribor Plus will be calculated using the true transactions’ rates. ‘This will make the subsitute more transparent, efficient and correspondent to actual situation’, said Jorge Lopez, analyst at XTB.

However, the stumbling block for the new index may be the fact that there are almost no operations conducted within more than a three-month term, so the sampling would be small (mortgages are tied to Euribor for 12 months).

Spain sees transactions for five day term maximum. According to the Bank of Spain data, on Monday the entities lent to each other €769 million for one day and €40 million for two to five days.

While the talks are being held, Spain’s central bank is looking closely at the four banks which contribute to the rate.

The Euribor for 12 months stands currently at its historic lows as it closed September at 0.362%, while October provisional average declined to 0.336%, making revised mortgages cheaper. If the Euribor Plus brings benefits to borrowers or, just the opposite, makes them pay more, no one will venture to play with it.

 

Original article: Cinco Días (by Miriam Calavia)

Translation: AURA REE

Santander Challenges Mortgage Offers With Euribor Plus 1.99% Loan

The bargain offered by the entity aiming at calling clientele´s attention as the cheapest option for buying a house on the market assumes to decrease the differencial in regard to Euribor of 2%. By now only Bankinter has applied such terms.

However, like with all mortgages, one shall not only look at the 1.99% added to Euribor. One must remember that in the first year the differential equals to +2,95%, let alone other determinants.

On its website Santander claims that the amount of the mortgage payment cannot be higher than 80% of the valuation or the first house purchase price and higer than 70% in case of a second house. Moreover, the maximum period for the mortgage will be 30 years for the first and 25 years for the second dwelling.

In order to enjoy the terms and conditions, the clients are ought to directly deposit their salary (or the sum of the borrowers´salaries) of an amount greater than 2.500 Euros or in case of being self-employed, the social insurance. Therefore, one shall do the shopping using 4B or Visa cards issued by the bank for more than 500 Euros and pay at least 9 receipts through the account where the loan has been deposited 3 months before the revision.

Finally, together with the New Santander Mortgage a client is obliged to take out a multi-risk home insurance from Aegon Santander Generales, Seguros and Reaseguros (General, Insurance and Reinsurance). In return, the Cantabrian bank gives an amount equivalent to insurance premium for the first year. The offer is valid by April 30th.

What is more, Santander explains that if a client does not meet the related requirements, the amount will equal to Euribor +2.99%, althought in the first year it will be also of 2.95%. In any case, the mortgage does not demand opening fee.

Source: Expansión

The euribor speeds up its fall in view of the possible sanction on deposits.

The interbank market has reacted to the information that reached the market yesterday concerning the possible penalty on the one-day deposits that banks leave in the ECB.

Mario Draghi, president of the European monetary institution, already referred to that when he declared that they were “technically prepared” to set a negative rate on the easiness of the deposits, although until now this institution has preferred to “leave this measure in the reserve”.

But yesterday rumors restarted on a possible action from the ECB on the easiness of deposits, which is a sort of piggy bank that the monetary institution puts at the disposal of banks who wish to deposit their money for one day.

Right now, banks do not obtain any benefit from leaving their money there, as the ECB left their profit at 0% in July 2012 with the intention of reactivating the credit and preventing banks from depositing their money there instead of lending it to families and companies. But this measure was not able to reactivate the credit, because although banks do not obtain any profit, they do obtain assurance.

For this reason members of the board of the ECB are studying a possible penalty of -0,1% on the easiness of deposits, which would mean that commercial banks would have to pay for leaving their money there. (…)

The euribor at 12 months has already reacted to this measure with a fall to 0,489%, that is six thousandth opposite to the 0,495% of yesterday. This would mean that banks would be ready to lend money among them at a fairly lower interest rate, although this does not mean that they actually do it.(…)

Source: Expansión