BBVA Has Renegotiated 66,166 Mortgages Since Start of Crisis

2 June 2015 – Expansión

BBVA has refinanced 66,166 mortgages and granted 11,680 “daciones en pago” (assignment of deeds in lieu of payment) since the start of the crisis, according to the report ‘BBVA’s Social Impact in Spain’, which was presented by the entity yesterday, having been prepared in collaboration with KPMG. The report seeks to quantify and detail the social impacts associated with the bank’s activity.

In Spain, 896,203 families live in homes financed by BBVA and during 2014, the entity granted new loans worth €1,379 million to 13,394 families for the acquisition of first homes. In addition, it financed 17,416 homes so that they could undertake energy efficiency improvements.

In terms of employment, BBVA has launched various initiatives such as “Yo Soy Empleo”, which has granted direct aid for the recruitment of almost 8,500 people; and “Project Momentum”, which has a 60% job placement rate.

The total number of jobs linked to the bank’s activity, including indirect or induced roles, amount to almost 100,293 people, i.e. 0.6% of the active Spanish working population.

Meanwhile, 951,284 individual shareholders received an average dividend of €870; 940,367 people have pension plans; and 875,448 employed people are covered by employment pension plans managed by BBVA.

Original story: Expansión

Translation: Carmel Drake

Kutxabank Stirs Up The Mortgage War With A 2.5% Fixed Rate Product

12 March 2015 – Expansión

Kutxabank launches one of the best offers in the market / The Basque entity enters the battle started by Sabadell and CaixaBank and seeks to foster loyalty from its customers.

Kutxabank continues to embroil itself in the mortgage war that has been unleashed in the Spanish financial sector, which is showing the first signs of economic recovery. Two months after the launch of mortgages offering rates of Euribor + 1%, the bank comprising the former Basque savings banks BBK, Kutxa and Vital, has now launched one of the most attractive fixed rate offers in the market: a 30-year 2.50% fixed rate product.

According to the entity, its proposal is the “most attractive” in the market because, not only is it offering a reduced interest rate, also this rate will remain unchanged throughout the life of the loan. The nominal interest rate (‘tasa nominal’ or TIN) of 2.50% represents an annual percentage rate (APR, ‘tipo annual equivalente’ or TAE) of 3.28%, according to the new calculation rules, which include various expenses.

Currently, several institutions are embroiled in the fixed-rate mortgage war. Sabadell is offering a nominal fixed rate mortgage at 3.25% (4.18% APR) over thirty years and at 2.90% over twenty years, and CaixaBank has loans at nominal rates of between 2.50% and 3%, depending on the other products held by the customer, and with no set-up fees. Other banks, such as Bankinter, Bankia and BMN are also offering fixed rate mortgages with interest rates of between 3.4% and 4.6%.

Just like with its variable rate mortgages, Kutxabank is looking to foster loyalty from its customers and achieve maximum links (with them) through this aggressive offer . As such, the entity requires them to have their salaries, which must amount to at least €3,000/month, paid directly into their accounts; make payments with the bank’s cards amounting to more than €3,600/year; make contributions to pension plans or social welfare institutions of more than €2,000/year, and take out life assurance contracts with Kutxabank. The set-up fees for the mortgage will be 0.25%, with a minimum charge of €400.

According to the Basque entity, fixed rate mortgages “provide greater security and stability” for customers, as they allow them to know what their instalments will be, at all times, regardless of (variations in) interest rates (in the wider market).

Kutxabank has a 35% share of the mortgage market in the País Vasco and almost 70% of its total loan book is concentrated there, amounting to €31,000 million. The bank is working on the assumption that the mortgage market is in full recovery, after increasing its home loans by 24% in 2014.

Original story: Expansión (by M. Á. F.)

Translation: Carmel Drake