BBVA Preps Its Collection Branch For 2015 Tender

12/11/2014 – Expansion

One of the most eagerly-awaited auctions by large international funds is beginning to take shape. BBVA and its advisor KPMG have announced that the sale of the debt collection unit will start together with the new year 2015 and will have been closed by the end of the first quarter thereof.

The process will mark the first huge divestment in a branch by BBVA since the recession hit. Unlike competitors, the bank chaired by Francisco Gonzalez has not awarded its arms with view to obtaining capital gains. For example, Santander did so with its real estate firm Altamira and collection division Reintegra, and CaixaBank granted a part of Servihabitat to a fund.

BBVA started to forge the sale just before summer but the process invoked dissents between the Financial and Risk departments. Moreover, the news caused a commotion in the labor union as the transfer would involve 200 employees of the branch.

The bank looks to finding an industrial partner who would help it to improve its collection performance rather than to obtaining high capital gains.

The Spanish market has been exceptionally popular among international investors that bought servicers and large NPL portfolios from the banks. For instance, Norwegian Lindorff purchased Reintegra and the collection units of Sabadell and BMN altogether. German firm EOS received a part of the business of Popular, Centerbridge acquired Aktua from Banesto and two U.S. funds Elliot and D. E. Shaw bought Gesif and Multigestión, respectively.

Until now, the banks that decided to shed their debt collection divisions (i.e. Santander, Sabadell, Popular, Banesto, BMN and Pastor) at least have earned €500 million from the sales.

Apart from the operation, BBVA has got a €2 billion NPL portfolio up for sale. Several funds bid for the package and it is expected to pay-off €50 million. The 98% discount is applied due to their being delinquent for a long time and the propensity to collect the debt is very low.

 

Original article: Expansión (by J. Zuloaga)

Translation: AURA REE

Popular hires KPMG to handle the sale of its real estate managing company.

Banco Popular has hired the consulting company KPMG to lead the sale process of the management of the real estate assets, properties, plots and credits that it has excluded from its balance sheet and transferred to the bad bank. Popular joins the current started by other institutions that have done the same previously. What has been place on the market is the management, not the ownership of the assets which will continue belonging to the bank.

KPMG has handed out basic information to thirty potentially interested parties, so that those who have decided may analyze in depth the conditions of the sale, so as to be able to present a non-binding offer as a first step.

The handed information refers to the volume of assets whose sale needs to be managed; the different types (apartments, offices, buildings, garages, trade premises, land, credits…) and the means offered by the bank to do so and which refer to the staff in charge of that activity and the offices where the assignment needs to be carried out.

Those who have received this information have between one month and one month and a half to analyze it and decide whether they find it interesting or not. It would be reasonable to end up with around ten firms that present a non-binding offer, so that a second round of contacts may be started with the objective of presenting a final offer. The final result should not be known before the end of December.

The approach of the sale is very open, in view of the increase in the number of companies specializing in this type of activity and the different operations already carried out by other institutions.

(…) Popular seems to be ready to study different offers as it can either get rid of all the management company with offices and staff, or it can accept, if the buyer is one of the funds that have already acquired other management companies, the cession of the company, without the transfer of staff or offices.

In this early stage it is not possible to define the approximate price of the operation and the earnings that Popular may obtain.