Spain’s Banks Continue to Suffer from High Levels of Exposure to Non-Performing Real Estate Assets

13 August 2019

Spain’s largest financial institutions still have more than 37 billion euros worth of non-performing real estate assets on their books, not counting non-performing loans, even after a series of major disinvestments over the past two years. The bank with the most significant exposure, Santander, sold €30 billion in assets to Blackstone; while BBVA sold another €13 billion to Cerberus. CaixaBank unloaded a €12.8 billion portfolio to Lone Star as Banc Sabadell sold assets totalling €10.1 billion to Cerberus and Oaktree.

EU banking regulators are pressuring the banks to quickly reduce their exposure even further, setting a high bar for the expected pace of disinvestment over the coming years.

Santander still has €10.132 billion in foreclosed assets, over 16% more than the bank with the second-highest exposure: Sabadell (€8.732 billion). Santander’s exposure to land is especially high, with a portfolio with a gross value of €4.37 billion. Thus, the bank recently created a company to prepare the portfolio for an eventual sale. The new company, Landmark Iberia, has 400,000 square meters of developable land for sale.

Original Story: El Confidencial – Jorge Zuloaga

Adaptation/Translation: Richard D. K. Turner

Banco Sabadell Sells Solvia Desarrollos Inmobiliarios to Oaktree for €882 Million

5 August 2019

Banco Sabadell has agreed to sell its developer, Solvia Desarrollos Inmobiliarios (Sdin), to the US-fund Oaktree. The sale, which includes a significant stock of land holdings, closed for 882 million euros and will generate an accounting gain of 23 million euros.

Sabadell split Sdin Residencial from the larger Solvia Real Estate before its sale to the Swedish group Intrum.

With this deal, Sabadell has practically eliminated toxic assets from its balance sheet, selling more than €12.5 billion in non-performing assets over the last year.

Thanks to the sales, Sabadell will now have a Tier 1 Common Capital Ratio of 11.6%, up from 11.2% in June. The bank hopes to reach 12% in 2020.

Original Story: Expansión – Sergi Saborit

Adaptation/Translation: Richard D. K. Turner

Unicaja Puts NPLs Worth €1bn+ Up for Sale Ahead of Merger with Liberbank

8 April 2019 – El Mundo

Unicaja has placed non-performing loans and assets worth more than €1 billion up for sale ahead of its merger with Liberbank, which was launched at the beginning of last year and whose completion is scheduled for the autumn.

The Málaga-based entity, which started 2019 with €3.6 billion in non-performing assets (NPAs) on its balance sheet, wants to clean up 30% of that amount over the next six months.

Meanwhile, Liberbank has carried out several operations in recent years to substantially reduce its volume of NPAs, but still wants to cut the figure of €3.2 billion as at December 2018 by half.

Both entities have actually been in the process of liquidating doubtful loans and foreclosed assets since 2015. But the upcoming merger and need to assign a value to their balance sheets is putting pressure on them to accelerate their respective clean-ups.

Last year, Unicaja divested €995 million in doubtful loans and foreclosed homes, land, garages etc.

Original story: El Mundo (by César Urrutia)

Translation/Summary: Carmel Drake