The Pace of NPL Sales Falters in Spain

6 December 2019 – Spanish banks have reduced their pace of sales of NPLs this year, as CaixaBank, Sabadell, Bankia, Bankinter, Unicaja and Liberbank unloaded a total of just 4.9 billion euros in the first nine months of 2019. Those financial institutions wrapped up the quarter with €35.006 billion of such assets on their books, 12% less than at the beginning of the year. In contrast, Spain’s banks in sold off €90 billion in non-performing loans and REOs in 2018.

Standard & Poor’s, on the other hand, published a report in February estimating that Spain’s banks should rid themselves of €30 billion in NPLS between 2019 and 2020. That figure would have lowered their collective NPL ratio to below 4% compared to 7% at the time. Both S&P and Spain’s central bank also argued that the banks needed to increase the pace of sales to prepare for a potential slowdown in the economy.

Original Story: El Economista – Eva Díaz

Adaptation/Translation: Richard D. K. Turner

 

Spain’s Banks Look to Sell €19 Billion in Real Estate Assets and NPLs in 2019

21 October 2019 – Although the pace of sales has fallen in recent years, Spain’s banks are continuing their efforts to reduce their exposure to non-performing loans and foreclosed real estate assets left over from the financial crisis of the first half of this decade. In the year to date, those banks have sold portfolios of toxic assets worth a total of more than €7 billion. Another twelve other transactions worth approximately €11.7 billion, however, are on course to conclude by the end of this year.

Sabadell has been particularly active, having sold €2.55 billion in portfolios such as Greco and Rex. Unicaja and Ibercaja have also sold assets worth more than €1.5 billion. Santander is currently negotiating the sale of another two portfolios.

Spain’s financial institutions are expected to end the year with total sales of nearly €19 billion, compared to 41.7 billion euros last year, down by more than half.

Original Story: El Español – María Vega

Adaptation/Translation: Richard D. K. Turner

Insur Refinances €100 Million in Outstanding Debts

20 July 2019 – Richard D. K. Turner

Inmobiliaria del Sur (Insur) took advantage of favorable market conditions to refinance its outstanding debt this week. The firm refinanced 100 million euros of debt, equal to 60% of its total net liabilities, at significantly better conditions, freeing up over 35 million euros over the next five years. Insur owns rental properties, including offices, commercial premises and car parks.

Insur Patrimonial arranged the refinancing in an operation involving a total of 11 banks, led by Santander. Those banks include Caixabank, BBVA, Unicaja, Sabadell, Bankinter and Novo Banco. In addition to the €100 million, the firm also borrowed another €10 million to acquire an office building in Seville for redevelopment into a hotel to be leased to Hotusa.

Original Story: El Confidencial – Carlos Pizá de Silva

Photo: F. Ruso

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

Debt Recovery Firm KRUK Prepares to Make its Real Estate Debut

18 March 2019 – Bolsa Mania

The debt recovery firm KRUK is getting ready to enter the real estate market. The company, which has already acquired debt portfolios in other segments (e.g. consumer loans) from entities such as Bankia and Unicaja, now wants to start buying real estate-related debt portfolios from the banks, servicers and Sareb.

Until now, the group has specialised in the unsecured segment in Spain. Last year, it acquired a portfolio of doubtful consumer loans from Bankia and a year earlier, it did the same with another similar portfolio from Unicaja. A few months ago, it purchased another from Carrefour’s financial arm.

Further afield, the company currently has a presence in Poland, Romania, the Czech Republic, Slovakia, Germany, Italy and Spain, with the last two markets representing its priorities for the time being.

Original story: Bolsa Mania (by Elena Lozano)

Translation/Summary: Carmel Drake

Unicaja Considers the Sale of a Large RE Portfolio in 2019

12 February 2019 – Expansión

Unicaja accelerated the clean up of its balance sheet during the course of 2018. The Málaga-based entity decreased its volume of non-performing assets by 22%, in such a way that it is now close to the reduction objective it established in its latest strategic plan for 2020. That is according to the figures provided by the bank itself during the presentation of its results for last year.

The entity chaired by Manuel Azuaga (pictured above) ended 2018 with a volume of non-performing assets (NPAs) amounting to €3.6 billion, of which €1.7 billion were foreclosed assets and €1.9 billion were non-performing loans.

In five years, the bank has reduced its toxic legacy by 51% or more than €3.8 billion. Unicaja’s commitment to investors was to bring its exposure to problem assets down below the €3.5 billion mark before the end of 2020. The rate of sales of small NPA portfolios has allowed it to get ahead in the calendar that it established in its strategic plan. But the entity will continue its clean up.

The heads of Unicaja have reported their intention to continue with small portfolio sales during 2019. Moreover, they do not rule out carrying out the sale of a large portfolio in order to segregate a majority of the non-performing exposure, in a similar way to what most of the Spanish banks have been doing over the last two years.

Unicaja’s decision to carry out a massive property sale will depend, like in other cases, on the discounts that the entity will have to apply to its portfolio. The NPAs of the Malagan bank have an average coverage level of 57%, which means that a discount of a similar percentage could be applied to the book value without resulting in accounting losses for the entity this year.

High asset quality

Unicaja is, together with Abanca, the only Spanish bank entity that still retains ownership of its servicer, the real estate subsidiary through which it sells its homes and commercial premises.

The recent decision by Sabadell to sell 80% of Solvia to Intrum followed other previous operations that have seen the Spanish banks undoing their positions in the property segment, including the sale of Servihabitat to Lone Star by CaixaBank, and of Aliseda to Blackstone by Santander.

Beyond Unicaja’s plans for its property, the entity has been recording a positive trend in terms of the quality of its assets for several years now. The net inflows of problem loans have registered eight consecutive quarters of decreases, and between September and December, they recorded the largest decrease in the bank’s historical series.

Since 2014, Unicaja’s default ratio has also decreased by almost half: from 12.6% recorded in December 2014, the Málaga-based entity has managed to clean up its balance sheet to bring the rate of toxic loans down to just 6.7%.

Original story: Expansión (by Nicolás M. Sarriés)

Translation: Carmel Drake

Unicaja Sells Problem Assets to Cerberus & AnaCap for €120M

23 January 2019 – Eje Prime

Unicaja is divesting its toxic assets. The Málaga-based entity sold two portfolios of problem assets amounting to €330 million to Cerberus and AnaCap at the end of 2018. In this way, it managed to clean up its balance sheet and improve its accounts for last year, ahead of the merger with Liberbank, reports El Confidencial.

The problem assets consisted of one portfolio of mortgages amounting to €230 million, which were sold to Cerberus and another portfolio containing property developer loans amounting to €100 million, which was acquired by AnaCap.

According to the latest published accounts, Unicaja held €3.9 billion in problem assets (flats, land and unpaid loans) as at September 2018, and so the two portfolios sold account for more than 8% of the total. In the market, it is estimated at the Málaga-based bank obtained proceeds of around €120 million in exchange for the sale of the two portfolios.

Original story: Eje Prime

Translation: Carmel Drake

Plans are Reactivated for Málaga’s 2,847-Home Urbanisation

8 Noviembre 2018 – Diario Sur

The 170 owners of the Rojas-Santa Tecla sector are working on the preparation of a project comprising 2,847 homes and a golf course.

After years weighed down by judicial lawsuits, which resulted in sentences that forced the review of the steps taken until then to approve it, the project to build the largest urbanisation in Málaga over the coming years is being reactivated. The board comprising its 170 owners, including individuals, as well as Unicaja, the real estate firm Altamira, the Ministry for the Environment and the Ministry of Defence, has published plans for the reparcelation of the sector known as Rojas-Santa Tecla, a complex of plots located to the north of the Benítez camp and to the west of the Carretera de Churriana, which measures 1,488,269 m2.

The plans include the construction of 2,847 homes on the site, which will be lined with new roads, which will run across the land surrounded by the population nuclei of Monsálvez, El Olivar and El Cortijo de Maza. The homes will be grouped around a golf course, which will have a surface area of 450,000 m2, spread over six sectors and will offer at least 18 holes.

According to the urban plan approved by the municipal plenary in March last year, this action will also have two plots for commercial use – one on the border with Torremolinos, on the other side of the motorway, and another to the north of the plots comprising the Benítez camp – which span 30,115 m2; a golf club on land measuring 3,000 m2; sports facilities on a surface area spanning 22,784 m2; social areas (24,207 m2); and school facilities (45,690 m2). Similarly, 330,353 m2 will be reserved for green space and 244,172 m2 for roads. The sector is crossed by a stream and by a cattle track that is free from buildings, although 29 homes currently exist on it, whose future will have to be analysed as a result of the development of this urbanisation, which will maintain the houses located around El Camino del Pilar.

€60 million

Proof of the size of this project is that the urbanisation work alone is expected to cost around €60 million, including the external charges that its developers will have to bear, the construction of the roads and the creation of the golf course. Nevertheless, several procedures will need to be completed before the construction work can begin, given that now is when the approval of the sectoristion plan is going to be launched, advised by the law firm Ius Urbis on the legal side and by the architectural studio HCP on the technical side. Approval from the Urban Planning Management department also remains pending, although it is currently being drafted.

Nevertheless, the large number of owners in the sector makes the execution of the project very challenging, and so its effective development will depend on what a property developer with sufficient economic capacity to undertake a project of this magnitude does with most of the urban planning rights.

Original story: Diario Sur (by Jesús Hinojosa)

Translation: Carmel Drake

Unicaja Takes In €20 Million Through Sale of Land

26 March 2018

Unicaja, the Malaga-based bank, is accelerating its sale of the real estate assets it was forced to take on during the financial crisis. Last year it sold a portfolio of land, reducing its holdings of foreclosed assets by one hundred million euros, and reported a gross profit, due to the transaction, of 20 million euros, according to a report.

In addition, Unicaja reached an agreement last year with the Norwegian fund Axactor to create two joint ventures and de-consolidate more than 4,000 foreclosed assets (in lieu of debt payments) valued at €252 million. The Nordic fund paid Unicaja between 150 million and 200 million euros in the transaction, according to knowledgeable sources. One of these companies will take control of 3,035 of Unicaja’s foreclosed assets, and the other will take on a further 1,034 foreclosed assets from España Duero. Axactor will control 75% of both, while the remaining 25% remain with the Unicaja group.

Unicaja’s real estate management platform, called GIA, will manage the properties. The majority are located in Andalusia and Castilla y León, where the two institutions are based.

The transaction has not had a significant impact on its financial statements, according to the report.

Property assets

In total, the Unicaja group, including its subsidiary España Duero, reduced its volume of unproductive assets by 21% last year. In absolute terms, €1.201 billion in toxic assets left its balance sheet. Such loans to developers and real estate assets generate many expenses and no income, reducing profitability.

Unicaja earned 138 million euros last year, 2.5% more than in 2016. The level of balance sheet provisions related to real estate stands at 64%, one of the highest in the sector. Its delinquency rate stands at 8.7%.

The bank has a market value of €2.225 billion. Investors who took part in its IPO in June 2017 have seen their initial investment go up by 23% in nine months.

Original Story: ProOrbyt Expansion – R. Lander / R. Sampedro

Translation: Richard Turner

Proinsa: The Final Piece of Reyal Urbis’ Empire Files for Bankruptcy

12 February 2018 – El Confidencial

Proinsa, Promotora Inmobiliaria del Este, has filed for creditor bankruptcy. The company is chaired by Rafael Santamaria, who, together with Joaquín Rivero, Enrique Bañuelos, Luis Portillo and Manuel Jove, were the property “lords” of the last real estate boom. Santamaría was also the President of Reyal Urbis, which starred in the second-largest dissolution ever of a real estate company in 2016, after that of Martinsa Fadesa.

Specifically, Reyal Urbis, which filed for its own creditor bankruptcy last summer, controls 70% of the company Proinsa, which is also dedicated to real estate development. Moreover, the two firms share a registered address on the Madrilenian street of Calle Ayala, just 50m from Paseo de la Castellana, where Rafael Santamaría Trigo, who also used to serve as the President of the Property Developers of Madrid (Asprima), used to have his office.

Last week, Mercantile Court number 1 of Madrid declared that Proinsa had filed for bankruptcy with a debt of almost €62 million and assets worth around €57 million, after it had withdrawn from a refinancing agreement in the middle of December 2016. In fact, that company’s short-term debt amounts to €34 million, of which €10 million corresponds to debt with various financial institutions and €21.5 million to Sareb. On the other hand, it has short-term debt amounting to €21.6 million with group companies. Moreover, at the end of 2016, the firm’s losses amounted to €1.1 million, and it held negative equity of almost €5 million.

In addition to Reyal Urbis, the firm’s minority shareholders include several companies from Burgos that form part of the same group: Inmobiliaria Espolón, Promotora Fuente Redonda, Grupo Río Vena Gestión de Obras and Alqlunia 2.

Proinsa held onto just one asset: a plot of land under development in Los Berrocales, one of the developments in the southeast of Madrid that was blocked by the Town Hall of Madrid fifteen days ago. Specifically, it owned 75% of an estate (La Fortuna) with a fair value of €57.1 million at the end of 2016, according to a valuation performed by Knight Frank. A single syndicated mortgage loan was secured over that estate from Sareb, Banco CEISS, Banco Mare Nostrum, Ibercaja and Unicaja, and with EBN Banco de Negocios acting as the agent bank. That loan was constituted in December 2006 and was subsequently novated on three occasions until the end of 2014. Moreover, in terms of unforeseen costs, Proinsa owed €6.5 million to the Compensation Board of Los Berrocales.

Almost half a century dedicated to real estate

The real estate businesses of the Santamaría family date back to 1970. As Nacho Cardero recounts in his novel “The Property Lords”, Reyal Urbis was constituted in March of that year by the current Chairman’s father, Rafael Santamaría Moreno, owner of the Layer Farm in Pinto, dedicated to the wholesale of eggs. “The laying hens were exchanged for cranes and the company turned the company on its head, changing its name to Reyal, which is Layer written backwards”.

The small construction firm would become one of the largest property developers in the country, after it purchased Urbis from Banesto in July 2006 for €3.3 billion, at the height of the real estate boom (…).

Until last week, Proinsa was the final piece at the base of that real estate emporium. And that final piece in the house of cards left many cards along the way, such as the ghost city of Valdeluz, just 67km from Puerta del Sol, in the province of Guadalajara and another symbol, alongside Seseña (Toledo) (…) of the excesses of the real estate party (…).

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake