CaixaBank SA is exploring the sale of €1.1 billion in non-performing loans (NPL) as it seeks to improve its asset quality
The Spanish lender is marketing two NPL portfolios that have already attracted potential bidders, according to documents seen by Bloomberg and people familiar with the matter. One is code named Oxygen and it has an outstanding balance of €610 million on about 7,000 unpaid mortgages. The other one, dubbed Cobalto, is comprised of about €500 million in unsecured loans to small and medium-sized businesses and consumers, the people said asking not to be named discussing private information.
A spokesperson declined to comment.
CaixaBank, Spain’s third-biggest lender, is taking the step to improve the health of its balance sheet, the people said. The bank has promised investors to keep its NPL ratio — a key metric of asset quality — below 3% this year.
The bank’s NPL ratio rose to 2.81%, or €10.8 billion, at the end of March, marking the second consecutive quarterly gain. The two increases were the first since CaixaBank bought rival Bankia over three years ago, according to data compiled by Bloomberg.
The increase partly happened because CaixaBank started applying “stricter criteria for the classification of non-performing loans within the prudential framework, thanks to rigorous and prudent management of credit risk,” it said in its earnings release last week. The metric is still “below the sector average,” it said.
CaixaBank has previously used disposals of NPL portfolios to clean up its balance sheet. Six years ago, it sold a real estate portfolio valued at €7 billion to Lone Star Funds.
Original Story: Yahoo Finance | Author: Bloomberg
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