24 April 2019 – El Confidencial
Unicaja Banco could become one of the first entities in Spain to sell refinanced mortgages whose borrowers are now up to date with their payments.
The Málaga-based entity has engaged EY to coordinate the sale of 3,700 doubtful loans worth €250 million. The mortgages went unpaid during the crisis and were all refinanced, such that the borrowers are now up to date on their payments.
To date, barely any Spanish entities have tried to sell assets of this kind. But pressure from the ECB to improve returns is forcing Unicaja to give it a shot. The mortgages are still classified as doubtful, since the Bank of Spain establishes that a borrower has to pay 12 monthly instalments and reduce some of the capital for a loan to be considered normal.
The sale of the mortgages by Unicaja has been called Project Biznaga and forms part of a larger asset divestment process being undertaken by the entity, worth around €1 billion. The sale is generating a lot of interest amongst international investors and is going ahead in parallel to the bank’s merger negotiations with Liberbank, which are in their final stages.
Unicaja has one of the lowest exposures to problem assets in the Spanish financial sector and the highest levels of coverage. According to the latest official figures, as at December 2018, it had €3.6 billion of foreclosed and doubtful assets and a coverage ratio of 57%.
Original story: El Confidencial (by Jorge Zuloaga)
Translation/Summary: Carmel Drake