Deutsche Bank: BBVA & Unicaja Cut Their Toxic Assets By 15% In 2017

14 November 2017 – Expansión

Deutsche Bank report / Sales to institutional investors of non-performing loans and properties allowed BBVA to reduce its stock by €4,589 million. Meanwhile, Unicaja has decreased its load by €818 million.

The clean up of the banks’ balance sheets is picking up speed thanks to the increasingly common sales of large property portfolios to specialist funds.

Between January and September, the average decrease in the stock of the large banks amounted to 6%; moreover, that figure reached 15% in the case of BBVA España. The next entity in the ranking was Unicaja, with a decrease of 14%.

During the third quarter, Santander España distorted the statistics with the sale of 51% of Popular’s toxic assets (€30,000 million) to Blackstone.

Project Jaipur

BBVA has closed several institutional sales in recent months. One of them, Project Jaipur, was sold to Cerberus, the fund with which it is now negotiating a macro-operation, which would include the sale of its real estate platform Anida. That portfolio comprises loans to property developers backed by real estate guarantees and has a gross nominal value of €600 million.

In February, BBVA sold a batch of 3,500 properties to the fund Blackstone. Another one of the representative operations of the year was the sale of 14 office buildings to Oaktree for €200 million.

Unicaja has sold several plots of land to various real estate developers in recent months. “Unlike in other quarters, during the third quarter of the year, most of the reduction in the banks’ problem assets came from the sale of foreclosed properties, despite the substantial decrease in activity in August”, says the recent report from Deutsche Bank.

Between June and September, CaixaBank was the most active entity, with sales worth €380 million.

The report cites several factors to explain the intensification of this real estate clean up. The first is the increase in the coverage ratio of these toxic assets on the banks’ balance sheets. “The volume of sales is directly linked to the coverage ratio”, it says.

The second is that many of these sales are generating capital gains. According to the data compiled by Deutsche Bank, Unicaja made €40 million in the third quarter and CaixaBank and Sabadell earned €6 million and €7 million, respectively. “These gains will allow them to accelerate future sales”, says the report.

Final quarter

The last quarter of the year tends to be the strongest for these types of operations. Sareb has put a package of doubtful loans up for sale, the vast majority of which are unsecured, for €2,600 million. “We expect to see an additional effort from the banking institutions to reduce the stock at year end. Having said that, the political uncertainty in Cataluna and the upcoming elections may affect prices and/or cause delays in institutional sales”, says Deutsche Bank, which forecasts further stock decreases of 15% in 2018 and 2019. According to its data, CaixaBank, Santander and BBVA are the banks with the highest volume of toxic assets. Since 2015, BBVA has decreased its real estate balance by 27% and Unicaja by 24%.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

Botín’s Plan For Popular: Get Rid Of Half Its Property

9 June 2017 – Voz Pópuli 

On Wednesday, the President of Banco Santander, Ana Botín (pictured above), said that the purchase of Banco Popular, announced this week, will give “certainty and stability” to the Spanish financial sector. Moreover, she denied reports that she had been put under any kind of pressure to intervene in the process.

At a press conference to explain the operation, which was signed at 7:00 on Wednesday morning, Ana Botín said that the operation was “the best option for providing continuity to such an important entity in the sector”, such as Popular.

She also highlighted that it is the first time that an entity has been intervened, due to a European mandate, without the contribution of any public money and she made it clear that “taxpayers will not incur any costs”.

The process was carried out through an auction, in which several entities reportedly submitted bids. Santander submitted its bid and it was accepted, explained the entity, before adding that it does not have any information about the other offers made.

Ana Botín sought to reassure Popular’s customers and employees, reminding them that Santander “has experience in this kind of operation”.


She said that the integration process “will take time” and that meanwhile, Popular’s customers do not have anything to worry about, because “nothing will change for them”. They will continue to be served by the same people in the same branches.

According to the President, the merger of the two banks will be good “for Spain and for Europe, and will contribute to the growth of the Spanish economy”.

She also explained that the entity will undertake a €7,000 million capital increase in a month’s time and will recognise provisions amounting to €7,900 million, of which €7,200 million will be allocated to the real estate sector, which will see its asset coverage ratio rise from 45% to 67%.

Santander’s intention is to get rid of, at least, half of Popular’s real estate assets in 18 months.

The head of Santander España, Rami Abhoukair, took the opportunity to send a message of calm to all of Popular’s employees and customers and to reassure them that from now on they form part of Santander.

Meanwhile, Botín said that together Santander and Popular “will constitute the best bank in Spain” and both teams will do a great job.

Original story: Voz Pópuli

Translation: Carmel Drake