NPL&REO News

Haya Real Estate’s AuM increased 14% up to €45.3 billion until June

Haya Real Estate (“Haya”), the Spanish market leader in the management of real estate debt and property assets reached €45.3 billion in Assets under Management (AuMs) at the end of the first half of the year, which represents a 14% increase versus December 2018.

Operating results (adjusted EBITDA) for H1 2019 amounted to €36.4 million (LTM €104.1 million). Including a large portfolio sale of over €1 billion by one of its core clients, completed in July, the adjusted EBITDA for H1 2019 would have been €55 million (LTM €123 million).

The Company has been working on a cost reduction plan since the beginning of 2019 aimed at optimizing its cost structure and creating a sustainable and more efficient business model for the future.

During the first half of 2019, Haya also reported a strong Free Cash Flow of €38.6 million (€120.4 million on an LTM basis), representing a cash conversion above 100% in the period due to the improvement in working capital coming from strong collections in the period. The corporate net debt at the end of June’19 was €427 million, with a proforma net leverage ratio of 3.3x including the large portfolio sold by one of its core clients.

The company’s transaction volumes were €1.7 billion in H1 2019, driving total revenues to €118.6 million (LTM €262.2 million) impacted by lower volume fees due to lower activity in REDs and REOs, partially offset by an increase in management fees and other revenues as a result of the contribution from new contracts (Divarian, BBVA and Apple), and other existing contracts, as well as from the good performance of the Advisory division. Including the portfolio sale contribution, transaction volumes would have been above €2.8 billion in the period (+20% YoY).

Original Story: Haya Real Estate | Press
Photo: HAYA REAL ESTATE SITE
Edition: Prime Yield

Spanish banks already cleaned up €130 billion in NPL from its balance sheets

The financial entities working in Spain have already cleaned up almost € 130 billion in non-performing loans (NPL) from their balance sheets in less than six years, since December 2013 when the NPL ratio totalled its historic peak of 13.61%.

Then, the NPL in the hands of the banks amounted to € 197.045 billion, comparing to the € 67.795 billion recorded in May 2019 – regarding a total credit volume of € 1,448 billion, once again, very much lower than the € 1,202 billion of last May. As a result, the NPL ratio stood at 5.64% in the end of May, hitting its lower since September 2010 and being almost eight percentual points below its peak.

The gradual improvements in the Economy and Employment, together with refinancing granted by the bank and the sales of NPL portfolios to investment funds have contributed to this NPL fall, which could reach the 5.35% by the end of the third trimester of 2019, according to the rating agency Axesor.

Still, the default ratio of real estate and construction companies should be 7.12% in the end of the third trimester, with € 7.541 billion in non-performing assets, adds Axesor. In the first quarter of 2019, this ratio stood at 9.9%, comparing with its high of 37% reached in December 2013.

The credit granted to societies related to real estate should keep falling over the next few months and is expected to hit the € 110.438 million by the end of the third quarter, far bellow the € 0,5 billion recorded in 2009.

Original Story: Expansión | Author: Expansión
Photo: Photo by Pablo Rodríguez from FreeImages
Edition & Translation: Prime Yield

 

Cerberus takes a real estate portfolio from Sabadell for €314 million

US fund Cerberus, through a subsidiary, has reached an agreement with the Spanish bank Sabadell to acquire a real estate portfolio for € 314 million. These assets have a net value of € 342 million, therefore the bank had to provision losses of about € 20 million.

The deal was closed through Cerberus Capital Management, a subsidiary of the US fund; with the bank headed by Josep Oliu keeping the control of a 20% stake in the buyer company, as explained in a note sent to Spain’s Stock Market Comission (CNVM).

This sale joins the macrooperation closed last July, in which the bank sold real estate assets valued in € 9.1 billion. These portfolios sold have a net nominal value of € 3.9 billion.

Original Story: EJE Prime | Author: News
Photo: Sabadell site
Edition & Translation: Prime Yield

Spanish banks waiting EU’s Court decision on whether they be forced to repay billions

 

Spanish banks are awaiting a key legal opinion on whether they should be forced to pay billions of euros in compensation for the way they sold a certain type of mortgage.

Advocate General Maciej Szpunar of the EU Court of Justice is set to publish a non-binding opinion on whether the lenders misled customers by failing to provide sufficient information when selling loans tied to the Bank of Spain’s Mortgage Loan Reference Index, or IRPH. The court’s rulings usually come four to six months later and follow such advice in a majority of cases.

The case has drawn parallels with the U.K.’s payment protection insurance scandal, which resulted in tens of billions of euros of compensation to customers. The Spanish banks could be ordered to pay clients as much as € 44 billion, Goldman Sachs Group Inc. estimated.

«In a worst-case scenario, this is a very serious problem,» said Pablo Manzano, vice president of the global financial institutions group at credit-rating agency DBRS. «The intensity could be less than PPI or it could be more.»

A Million Loans

About € 108 billion of home loans linked to IRPH, marketed as an alternative to the Euribor benchmark, were sold since 1999, according to DBRS. Some 1 million customers in Spain bought them, paying an average of 25,000 euros more than those who took Euribor-linked loans, according to an estimate by the Association of Financial Users (Asufin).

Several banks have said they’re optimistic that the EU’s top court will uphold a 2017 ruling by Spain’s Supreme Court, which concluded the methods used to sell IRPH weren’t abusive. Still, Spanish banks bore the burnt of a ruling from the European court as recently as 2016, when it ordered them to pay back billions of euros for imposing so-called mortgage floors — clauses in loan contracts that prevented borrowing costs from falling in line with benchmark rates.

In DBRS’s Manzano opinion, the European court is likely to side with banks this time, especially since a ruling against them could open up claims over other types of mortgages across the EU where the rate calculation wasn’t sufficiently explained.

Europe’s highest court is reviewing a case referred to it by a Barcelona tribunal. The waters have been muddied somewhat by a report issued by the European Commission’s legal team in September 2018 that said Spanish judges should be allowed to nullify contracts and offer customers the opportunity to switch to obtain better rates.

Banks haven’t reported the full extent of their exposure to potential claims, only publishing their outstanding IRPH-linked mortgages. CaixaBank SA has the most with € 6.4 billion as of June 30. That’s followed by Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA with € 4.3 billion and € 3.1 billion respectively.

Original Story: Bloomberg | Author: Charlie Devereux 
Photo: Photo by Philipp K from Free Images
Edition: Prime Yield

SAREB is looking for alternative servicers to manage its portfolio

Spain’s bad bank has recently put in the market  a contract for the management of €34 billion in non-performing loans (NPL) and real estate assets (REO) that it still has in its portfolio, according to El Confidencial.

The biddings presented by the four major servicers failed to comply SAREB’s targets, making the entity to contact other specialezed companies such as Hipoges, Finsolutia or Copernicus. With this, the bad bank has also sent a message to Haya Real Estatem Servihabitat, Solvia and Altamira, that they should improve their offers in order to they are not left without contracts.

In this way, SAREB is also analysing the possibility of splitting some parts of tis portfolios by geographic areas or by keeping two managers by are in order to simplify the management.

Original Story:EJE Prime
Photo: Sareb Linked In
Translation & Edition:Prime Yield

Castlelake and Urbania take up Unicaja’s toxic asset

Castlelake and Urbania have bought toxic assets from Unicaja. The US investment fund and the real estate group have acquired the lands from a portfolio that included problematic assets and mortgages that were paid-up to date. The mortgage part was bought by Mediterráneo Vida.

Among the lands bought by Urbania there is a plot located in Sánchéz Blanca area, in Malaga, for which are planned 2,000 dwellings, according to El Confidencial.

These assets were part of a portfolio valued in €830 millions, that the bank as finally successfully sold for €949 million, getting capital gains of €17 millions.

Original Story:EJE Prime 
Photo: Unicaja banco site
Translation & Edition:Prime Yield

Spain’s credit supply shows to be less expansionary

The recently published Survey of Banking Loans in Spain and Monetary Union shows a less expansionary evolution in the supply of credit in Q2 2019 compared to previous quarters. Specifically, the criteria for the approval of credit to households in Spain have been tightened.

In addition, the demand for credit in Spain has also slowed. The entities surveyed believe that regulatory measures have led to a certain tightening of the credit supply.

For Bankinter analysis team, the tightening of the criteria for the approval of credit to households is consistent because, on the one hand, the strong growth in credit for consumption which has been observed in recent years and, on the hand, with the metrics for the concession of mortgage credit which already had the highest Loan-to-Value (LTV) in recent years, much higher than in the years of the housing bubble.

Original Story:The Corner 
Photo: Xexo Xeperti/FreeImages.com
Edition:Prime Yield

Lone Star completes the acquisition of a €2.7 billion REO portfolio from Bankia

US private equity fund Lone Star is now the official owner of a portfolio of real estate assets (REO) and non-performing loans (NPL) with a gross value of € 2,703 million purchased from the Spanish bank Bankia.

According to a note sent to Spanish Securities Commission (CNVM), the correspondent value from the real estate total €1,420 million while the NPL has a gross value of €1,283 million.

This operation is restricted to the assets owned by the two societies established by Lone Star and Bankia back in December 2018 to together manage and develop a portfolio of real estate and bad loans that was then valued in €3,070 million.

The difference between the final value of the sale and the initial value– of €367 million – is due to the «the organic recovery and the day-to-day management of the assets that had have been taken since the signature of the agreement until now», explains the banking entity.

Original Story:Eje Prime | News |
Photo: Bankia site
Translation and Edition:Prime Yield

Caixabank and Sabadell cut income forecasts

Spanish banks Caixabank and Banco Sabadell cut their income forecasts for 2019 because interest rates were expected to be lower for longer than expected in the euro zone.

Caixabank, the country’s third-largest lender in terms of assets, reduced its guidance for core revenue to a growth of around 1% in 2019 from the 3% expected previously.

Sabadell, the fourth-largest lender, revised its net interest income (NII) guidance to between 0% and -1% in 2019. It had previously forecast a NII growth of 1% to 2% for 2019.

In a precursor to a rate cut, the European Central Bank said it saw rates at present or lower levels through mid-2020, a subtle change to its previous pledge to keep rates unchanged through next June.

Lending income at both banks remained under pressure in the second quarter and in the first half of the year.

Net interest income – a measure of earnings on loans minus deposit costs – at Caixabank rose 0.9% in the second quarter to €1.24 billion. Analysts had forecast a NII of €1.25 billion, according to a Reuters poll.

At Sabadell, NII rose 0.6% to €905 million against the same quarter last year. Analysts expected NII to come in at €909 million. In the first six months of 2019 NII edged 0.2% lower to €1.81 billion compared to the first half of last year, in line with analysts’ forecasts.

Original Story:Reuters | Jesús Aguado
Photo: CaixaBank Site
Edition: Prime Yield

Credit Suisse expands Spain’s private banking unit

Credit Suisse International Wealth Management, the private banking division of the Swiss firm, has bolstered its business in Spain with the appointment of four private bankers.

The quartet of bankers will be based in the firm’s office in Madrid focusing on high net worth individual clients.

Paloma Gómez de la Higuera joins the Swiss firm as a senior private banker from Popular Banca Privada. With around 22 years’ experience in the industry, she previously worked at entities including Bankinter and Bestinver.

Jaime Beruete Concostrina, also appointed as a senior private banker, comes from the London office of Fisher Investment. He brings to the role 12 years’ experience in the sector, mostly gathered at the private banking and portfolio management areas of companies like JP Morgan and Jefferies International.

Patricia Fitzgerald joins the Spanish team of Credit Suisse in Madrid from the group’s New York office, where she was responsible for emerging markets fixed income and structured loan products. She started her financial career at Citi.

Carlos Núñez Alfaro, the fourth addition to the team, joins from Atl Capital and brings experience in private banking and M&A analysis.

Original Story: Investment Europe | Eugenia Jimenéz
Photo: Crédit Suisse site
Edition:Prime Yield

Moonlake Capital has €600 million to buy toxic assets in Spain

Focused to expand its presence in Spain, Moonlake Capital has €600 million to acquire in large portfolios of non-performing loans backed with mortgages in Madrid, Costa del Sol, Balearics, Valencia and Seville, through a new investment vehicle.

With this new vehicle – to be officially launched during next year, that will work as the fund’s servicer by manging and selling the assets included in the portfolio – the company headquartered in Madrid will start to compete with names such Servihabitat, Altamira, Solvia and Haya Real Estate, among others.

Original Story: EJE Prime |:Marta Casado Pla
Photo: Photo by Pablo Rodríguez from FreeImages
Edition & Translation:Prime Yield

Spain’s NPL ratio falls to 5.73% and reaches a 9 year minimum

Spain’s Non Performing Loan (NPL) ratio continued to decline in the first quarter of 2019 up to 5,73%; reaching its lowest level since November 2010 says Spain’s Central Bank.

This results from the continued decrease of the NPL stock, which shrank by almost €1 billion, together with the upward trend in credit granting.

According to the latest data released by Spain’s Central Bank, the NPL stock was already bellow the €70 billion barrier since January, and have further declined in March, standing at €68,844 million – €908 million less than in February.

As for the credit granted, it increased to a total of €1,202 million, after reaching the €1,195 million in February.

This 5.73% NPL ratio represents a figure almost 8 percentage points lower than the 13,61% historic peak recorded in December 2013, and a 1,07 percentage points decline from the 6.8% recorded in March 2018.

Original Story: RTVE|EFE
Photo: FreeImages.com |Xexo Xeperti
Edition & Translation:Prime Yield

 

Europe’s financial system remains fragile and fragmented

The European financial system remains fragile and fragmented due to the close relationship between sovereigns and banks, European Central Bank policymaker and Governor of the Bank of Spain Pablo Hernandez de Cos said.

«Investment portfolios are not well diversified and investment opportunities are lost as these may not always be matched with savers’ funds. The financial system remains fragile and fragmented because of the doom-loop between sovereigns and banks,» de Cos said during a conference in London.

The EU still lacks the necessary fiscal tools to cushion against asymmetric or large systemic shocks in the euro are, he said.

De Cos also noted that it was essential for policy makers to strengthen European regulators. «As European markets become more integrated and technologically complex, this is becoming a more essential element that policy-makers need to address,» he said.

Original Story:Reuters | Marc Jones 
Photo: FreeImages.com/Szymon Szymon
Edition:Prime Yield

EIB and Banca March provide €340 million to finance SMEs

The European Investment Bank (EIB) and Banca March are joining forces to provide financing on favourable terms for Spanish SMEs and mid-caps. EIB Vice-President Emma Navarro and Banca March CEO José Luis Acea signed two agreements in Madrid enabling the Spanish company to provide up to €340 million in financing to support the investments of small and medium-sized enterprises.

Firstly, the EIB has granted a €70 million guarantee to Banca March on a portfolio of pre-existing loans to mid-caps. This guarantee will enable Banca March to build up a new loan portfolio of up to €140 million. The agreement was made possible by the support of the Investment Plan for Europe, known as the “Juncker Plan”. This means that Banca March now has more resources to foster investment among mid-caps, especially investment focusing on innovation and projects promoting climate action.

Secondly, the EU bank has provided Banca March with €100 million of financing – to which it will add a further €100 million of its own funds – for expanding SMEs’ financing capacities. The two agreements signed today will enable SMEs and mid-caps to access €340 million on favourable conditions, in terms of both maturities and interest rates.

Banca March CEO José Luis Acea said: «Banca March is dedicated to remaining a point of reference for companies, family businesses and business families, and to this end has a specialised range – unique in Spain – that drives the business-entrepreneur dynamic. These agreements with the EIB enable us to move forward with our firm commitment to bring the best and most appropriate financing options to companies via a specialist family-run bank.»

Original Story:Noticias Bancárias |  News
Photo: Banca March site
Edition:Prime Yield

CaixaBank is back with further NPL sales in 2019

After the sales boom recorded along 2017 and 2018 in Spain, CaixaBank is now back in the NPL sales business.

One of Spain’s top banks, Caixa Bank has just launched one of the first and largest Non-Performing Loan (NPL) disposals of this year: Project Niseko, with a gross nominal value of about €700 million, according to sources listened by El Confidencial.

Aiming to obtain at least €300 million, CaixaBank hired KPMG’s advisory for the sale process of this portfolio which is divided into two different segments. The first, named Hokkaido, groups eight large loans with real estate collaterals and a gross initial value of almost €400 million. 70% of the properties supporting the portfolio are commercial (offices and stores) while the rest are residential (20%) and land (10%). Named Sapporo, the other part of the portfolio is made-up of other 100 smaller credits (with an average value of €2.4 million, each) with a gross value of more than €300 million shared equally among land, residential and commercial properties.

Project Niseko is one of largest NPL portfolios available for sale in the present, along with three others (with gross value of about €1 billion each) that were put on the market by entities like Bankia, Unicaja and Ibercaja.

Original Story: El Confidencial | Jorge Zuloaga 
Photo: CaixaBank site
Edition & Translation:Prime Yield

Unicaja and Liberbank call off merger deal

The process of merger of the two mid-sized Spanish banks Unicaja and Liberbank was cancelled after the two lenders said they could not reach a deal over the terms of a share swap.

Merger talks started in the summer of 2018 which, in the case an agreement had been reached, would have created Spain’s sixth-largest bank with around € 100 bn in assets and headquartered in the Andalusian city of Malaga

According to sources close to the matter, Unicaja wanted to take a 60% stake in the new entity, a proposal rejected by Liberbank, which was talking of a 55% instead, leaving itself with a minority stake of 45%.

Last month, in a bid to accelerate the operation, both the president of Unicaja, Manuel Azuagaand, and the chief executive officer of Libernank, Manuel Menéndez, had met the European Central Bank in Frankfurt to present all the details on the merger project.

Liberbank was created out of the merger of three regional savings banks in 2011, in the midst of Spain’s banking crisis.

Unicaja, based in the Andalusian city of Málaga, was created from the merger of five local savings banks in 1991.

Original Story:Investment Europe | Eugenia Jimenéz
Photo: Unicaja Banco site
Edition:Prime Yield

SAREB enters into negotiations with TPG for the sale of Tempore Properties

Spanish «bad bank» Sareb has entered into formal negotiations with the American fund TPG Real Estate Partners III, L.P. for the sale of part of its stake in the REIT Témpore Properties, which currently equates to 98.38% of the share capital.

This move forms part of the competitive sales process that Sareb launched a few months ago to dispose of part of its stake in the REIT it created at the end of 2017, and which listed on the Spanish Alternative Stock Exchange (MAB) in April 2018.

At YE 2018, Témpore Properties posted a net profit/(loss) that exceeded initial estimates – booking a loss of EUR 384,394 euros, 13% less than forecast in the Information Document for Listings on the Spanish Alternative Stock Exchange – MAB (DIIM). The REIT estimates that the company will start to turn a profit in 2020.

At 31 December 2018, Témpore managed a portfolio of 2,249 residential rental properties across various provinces of Spain, had obtained a revenue of €7.3 million and reduced its portfolio arrears rate from 5.5% at YE 2017, to 4% at YE 2018.

Original Story: Cinco Días | PR 
Photo: Linked In SAREB
Edition & Translation:Prime Yield

Divarian Facebook

Haya Real Estate reaches €49 billion AuM after Divarian’s merger

US private-equity fund Cerberus gave the green light to merge Divarian, the company created in joint-venture with BBVA after the acquiring the bank’s real estate assets, with its servicer Haya Real Estate. After the merger, Haya will manage more than 200,000 assets and reach €49 billion of assets under management (AuM).

The agreement also includes the integration of Divarian’s operational real estate management capabilities in Haya, including employees and other resources. The transaction is expected to be completed by early June 2019.

This transaction will consolidate Haya as the flagship real estate servicer in Spain, with more than 1,250 direct employees and €49 billion assets under management. The company will increase its capillarity, as well as its real estate management and marketing capabilities, throughout the Spanish territory. This will allow Haya to underpin its position as well as to accelerate growth and continue offering a first-class service to its clients.

Thanks to this transaction, along with the recently announced agreement to manage the Apple portfolio – the Cerberus and Banco de Santander joint venture -, the Company further diversifies its client portfolio. Currently, Haya provides services to SAREB, BBVA, Bankia, Grupo Cajamar and Liberbank, in addition to other institutional funds.

«We are thrilled with this transaction. Divarian’s team has a strong and proven asset management capability and we believe that this union will allow us to strengthen our business, as well as enrich our portfolio of services. A stronger and more competitive company will result thanks to the combination of our technical, commercial and human capabilities. This agreement gives us a unique position to continue growing, not only in the number of clients, but also in services», Carlos Abad, CEO of Haya Real Estate, said.

Enrique Dancausa, CEO of Divarian, said: «We are convinced that this transaction ensures the best service for the company’s assets and creates the best value for our shareholders by leveraging on the combined capabilities of both organizations. In addition to this, the transaction expands the career development opportunities for Divarian’s professionals as they become part of one of Spain’s leading servicers».

Original Story:Europa Press | PR
Photo: Divarian (Facebook)
Edition:Prime Yield

Haya Real Estate increases its lease portfolio by more than 50%

Haya Real Estate, one of Spain’s leading companies in the management of debt and real estate assets reached record volumes with 20,838 assets in its lease portfolio in 2018, which represents an increase of more than 50% compared to the previous financial year.

At the close of 31 December 2018, Haya’s lease portfolio was valued at more than 2 billion euros and its average profitability was around 5%. The more than 20,800 assets managed under lease correspond to six large customers, which include banking entities, asset investors and insurance companies.

. In the last three years, the company has registered cumulative growth of 192% in the number of leased assets.

At the close of the previous financial year, the Haya Real Estate’s lease portfolio was made up of 78% residential assets, compared to the remaining 22% which is made up of tertiary assets, like offices or logistical warehouses. Region of Valencia (16.2%), Catalonia (12.8%), Madrid (12.0%) and Andalusia (11.3%) are concentrated the rest of the available portfolio. 57% of its portfolio is atomised.

Haya offers cover for all of the real estate cycle, from the credit management to the marketing of the property, also including the asset promotion and management. In addition, the company offers support in decision-making through its Advisory area and an alternative for the financing of projects through asset securitisation.

Original Story: EJE Prime | PR
Photo: Haya Real Estate
Edition & Translation: Prime Yield

 

ING puts PwC in charge of selling a €100 million NPL portfolio

The Spanish subsidiary of the Dutch group has put for sale a NPL portfolio, having PwC as advisor. Named “Project Silex”, the portfolio has gross nominal value of €100 million.

Including consumer and SME credits, even though some of the loans have collaterals, most of them are unsecured NPL, according to sources close to the operation.

This one more unsecured NPL portfolio to be put for sale over the last few months.

International funds specialized in the market have entered in Spain over the last few years, attracted by the growing in consumer credit at a pace of 20%. The country’s National Bank has already warned that «the accelerated growth in consumer credit could lead to higher increases in non-performance». According to Spain’s Central Bank latest figures, the NPL ratio stood at 3.2% last year for credit of durable goods and at 7% in the case of credit for the acquisition of other goods and services.

Original Story: El Confidencial | Oscar Gimenez
Photo:ING Site
Edition and Translation:Prime Yield

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