The US bank has set its sights on the credit cards of Bankinter, which has put a portfolio of loans worth €450 million up for sale.

Goldman Sachs has renewed its appetite for Spanish debt portfolios. A year after it completed the sale of all its real estate portfolios in our country, portfolios acquired during the great financial crisis, it has decided to make another move in Spain.

This time it is focusing on Bankinter’s credit cards, a company that has put up for sale a portfolio of loans worth €450 million.

According to Bloomberg, the US company is the favourite to acquire this portfolio, which consists of loans to 50,000 former credit card holders.

The decision by the bank, chaired by María Dolores Dancausa, to sell this portfolio is part of a general move by the sector to control the default rate, which has been a concern following the rise in interest rates.

Bankinter’s NPL ratio stood at 2.2% in the second quarter of this year, slightly above 2.1% in 2023, a ratio that will reach 2.5% for its Spanish business, below the 3.4% estimated by the Bank of Spain for the entire system in our country.

The process initiated by Bankinter is no exception, and several Spanish banks are already trying to get rid of billions of euros in view of the new interest rate scenario.

Original Story: El Confidencial | Author: Cotizalia
Edition and translation: Prime Yield

BBVA has kicked off the sale of a portfolio of 600 million euros in non-performing mortgages, a process that is part of the bank’s interest in improving its capital ratio. The entity chaired by Carlos Torres has hired Alantra to carry out an orderly process of these loans, a transaction that is expected to go to market in the coming days, according to Bloomberg. This is one of the largest portfolios that BBVA has brought to market in recent years and, moreover, comes at a critical time for the bank, which is in the midst of a takeover bid to try to acquire rival Banco Sabadell.

The sale of portfolios of doubtful assets is one of the bank’s formulas for freeing up provisions and, with them, improving its capital ratios. A reasoning that seems to be behind both BBVA’s move and the portfolio that Sabadell has also put on the market.

The Catalan entity has put up for sale the third portfolio of doubtful loans it has launched so far this year, a portfolio comprising 380 million euros in unpaid consumer and SME loans. These are unsecured loans, which are usually sold to opportunistic funds at significant discounts. Between 2023 and 2024, BBVA has also placed three portfolios on the market with a total volume of €1,100 million.

Original Story: El Confidencial
Edition and translation: Prime Yield

DoValue, Hipoges (KKR) and Anticipa-Aliseda (Blackstone), three of the largest servicers in Spain, have major management contracts due for renewal in Spain before the end of 2025.

Specifically, DoValue’s rights to a Santander portfolio (approximately €20 billion) and Hipoges’ (€14 billion) and Anticipa-Aliseda’s (11,400 million) rights to the Sareb portfolio will expire by that date. In total, around 45 billion, according to figures from Atlas Value Management, which EL ESPAÑOL-Invertia has had access to.

It should be recalled that the management of a Cajamar portfolio, in which Haya Real Estate – now Intrum – held a number of rights, was also due to expire this year. Last July, the Almeria-based rural savings bank announced that it would manage all the assets internally and would not renew the contract with Intrum. Intrum had been managing the assets for 10 years and had a total of 7.4 billion in assets at the time of the crisis.

Once this first round of renegotiations is complete, it will be Intrum, currently the largest servicer in Spain in terms of volume, that will have to put on the overalls.

In 2026, their rights to a €4 billion portfolio from CaixaBank, another €3 billion from BBVA – inherited from Haya – and another €2.5 billion from Ibercaja expire. In 2027, they also have another portfolio from CaixaBank, also inherited from the company acquired in 2023, for €9.600 billion.

Source: El Español | Author: Diego G. Camporro
Translation and edition: Prime Yield

Canada Pension Plan Investment Board (CPPIB) has put a portfolio of distressed Spanish loans up for sale, as the fund works to reduce its exposure to the country built up during the financial crisis last decade.

The sale comprises loans with a face value of around €300 million in unsecured, non-performing loans, according to people familiar with the matter. Canada’s largest pension fund obtained the assets bundled along with a larger portfolio and they will likely be sold at a heavy discount to par, still generating returns, the people said, asking not to be identified discussing private details.

The Canadian pension fund previously acquired substantial debt assets, including real estate portfolios, from Spanish banks such as Banco Santander SA. While working down that exposure, the fund’s broader strategy involves nearly doubling the size of its private credit holdings over the next five years.

Earlier this year, CPPIB had explored the sale of a separate portfolio with a face value of around €1 billion although that process is now on hold, according to people familiar with the matter.

CPPIB declined to comment on the potential sale.

Original Story: BNN Bloomberg | Author: Jorge Zuloaga and Paula Sambo
Edition: Prime Yield

The volume of non-performing loans (NPL) held by banks on their balance sheets at the end of May was €42.353 billion, an increase of €212 million compared with April, bringing the ratio to 3.60%, slightly above the 3.59% of the previous month, according to the latest data published by the Bank of Spain.

Compared with May 2023, there was a fall in the volume of NPL of €475 million, with a ratio of 3.59%. The difference between one year and the next is therefore due to the fall in the total balance of credit, which increases the proportion of NPL among all the credit that the bank has.

Specifically, at the end of May, the total credit balance stood at 1,174 billion, a reduction of €430 million compared with April. Compared with May 2023, the volume of bank credit has been reduced by €16.969 billion.

The data broken down by type of institution show that the doubtful assets ratio of deposit institutions as a whole (banks, savings banks and cooperatives) closed May at 3.49%, two basis points higher than in April and the same level as in May 2023.

In May, this type of institution recorded a doubtful assets portfolio of €39.073 billion, €170 million more than in April and €698 million less than in May 2023.

Credit financial institutions saw their NPL ratio rise in May to 6.64%, compared with 6.58% in April.

In absolute terms, the volume of doubtful loans of this type of institution was €2.98 billion at the end of May, 41 million more than in April. Compared with the end of May last year, the doubtful balance has been reduced by €313 million.

According to data from the Bank of Spain, provisions for all credit institutions stood at €29.984 billion in May, a decrease of €51 million compared with April. Compared with a year earlier, provisions fell by €885 million.

Original Story: Bolsamania | Author: Europa Press
Edition and translation: Prime Yield

Cerberus Capital Management LP is one of the frontrunners to buy a Spanish bad loan portfolio worth more than €2 billion from Hoist Finance AB, according to people familiar with the matter.

The process is in final stages and expected to close by late July, according to the people, who cannot be named as discussions are private. Cabot Credit Management Ltd and Kruk SA are also vying to acquire the assets, according to the people. 

Officials for Cerberus, Hois, Kruk and Cabot declined to comment. 

Hoist is a long-term investor in the Spanish credit sector and the country is its third largest market by assets, at around 16%, after Italy and Poland. The Stockholm-listed company recently agreed to buy a €270 million portfolio of non-performing mortgages (NPL) from Banco Santander SA, Bloomberg reported.

The sale being negotiated with Cerberus is part of Hoist’s strategy to regularly sell assets to free up balance sheet for new deals.

Cerberus is also in the process of trying to acquire about €7 billion in European bad loans from Norwegian debt collector Zolva Group. The loans are mostly from Spain and Norway.

Original story: BNN Bloomberg | Author: Jorge Zuloaga
Edition: Prime Yield

Defaults in consumer credit have once again experienced an upturn that puts banks on their guard. There are several portfolios of doubtful loans on the market to reduce the NPL ratio, which has once again exceeded 7% and has reached the highest level in eight years.

This is shown by the latest data from the Bank of Spain on doubtful loans in financial credit establishments (EFC), which go up to April. These institutions specialise in consumer credit. Although not all consumer credit is in this niche – some banks channel it without CFCs – it is the best approximation for assessing the trend and health of the segment.

Since the covid crisis, the delinquency rate of SCIs has been on an upward trend, although it is gradually experiencing a significant decline, which can be explained by the sale of doubtful portfolios by these institutions to opportunistic funds that buy unpaid loans at a discount. In this case, the discount applied can exceed 90%.

The latest statistics point to a new increase in non-performing consumer loans, up to €3,060 million, compared with €2,852 million in the same month of the previous year. There has been a year-on-year increase of 7.3%, and the NPL ratio has risen to 7.18%, the highest level since May 2016.

On several occasions over the past four years, NPLs have touched 7%, but have always been reduced afterwards by the loan drain. On this occasion, the increase in NPLs can be explained both by the rise in NPLs and by the fall in the total volume of outstanding credit of SCIs, which acts as the denominator, and which fell by €1,111 million between March and April, to €42,638 million.

The Bank of Spain has observed this further deterioration in consumer credit quality, although it is not alarming. As the deputy governor and acting governor, Margarita Delgado, pointed out at the APIE forum in Santander, there has been an 8% increase in loans under special surveillance in consumer lending.

 Consumer credit is always the first warning sign of a possible worsening of the stock of loans on banks’ balance sheets, as households always default sooner, in case of need, on a contract of this type than on a mortgage. These are loans with higher rates and without collateral.

In the banking balance sheet as a whole, the overall NPL ratio remains contained, and in April stood at 3.6%, with a volume of non-performing loans of €42,141 million, compared with a total outstanding stock of €1.17 trillion.

Original Story: El Confidencial | Author: Óscar Giménez
Edition and Translation: Prime Yield

The banks are facing a scenario of high interest rates in Spain with limited defaults, thanks to a good response from customers who are paying their debts and the transfer of the riskiest loans to non-regulated financial institutions. They sell them at a discount, but in return they get rid of some uncertainty and keep their balance sheet in check.

Last year, €17.7 billion worth of non-performing loans (NPLs) were sold in Spain, according to a report published today by Axis Corporate. The activity has been revived amid rising interest rates.

Of this amount, €8.2 billion was raised by traditional banks. There were two major transactions outside this regulated circuit: the sale of a €6 billion portfolio by the Norwegian multinational specialising in debt collection, Axactor, and the sale of a €2 billion portfolio owned by Blackstone and transferred to Cerberus.

Sareb, Santander and BBVA, among the most active

Within the regulated entities, Sareb – owned by the State through the Frob and several banks – sold NPLs to Axactor for 3 billion, integrated in a portfolio of NPLs called Victoria.

Other portfolio sales were carried out by Deutsche Bank to Cerberus for €1.6 billion and by Santander to several firms in four transactions for €1,707 million.

BBVA made three divestments for €830 million. These were, on the one hand, the Artemis portfolio, transferred to KKR, and, on the other, the Nairobi portfolio, which went to Cerberus and Kruk.

CaixaBank made two transactions valued at €645 million, one with Link and the other with Kruk, to divest a portfolio called Twister. Goldman Sachs sold a 350 million portfolio in Spain to Bank of America.

What is the distressed debt firm, as this type of company dedicated to problem assets is known, that has bought the most doubtful portfolios from banks? It is the US fund Cerberus, which has acquired portfolios valued at €4.51 billion.

Part of the result of all these movements is the low NPL ratio exhibited by Spanish banks. Santander, BBVA and Sabadell report ratios of between 3% and 3.5%, while CaixaBank, which is the most popular among retail customers in Spain, puts it below at 2.7%.

There are two banks in Spain, Ibercaja and Kutxabank, which have managed to bring their NPL ratio below 2%. The former stands at 1.6% and the latter at 1.2%.

Doubtful loans on banks’ balance sheets have fallen in Spain from 3.7% in 2022 to 2.75% in the second quarter of 2023, despite rate hikes and the fact that the unemployment rate is still the highest in Europe.

Original Story: La Vanguardia | Author: Iñaki de las Heras
Edition and translation: Prime Yield

Bankinter is looking to sell several loan packages collectively valued at around €550 million, joining other Spanish banks that are also shedding assets in an effort to lighten their balance sheets in the face of potential financial problems stemming from high interest rates.

Specifically, the Madrid-based bank is seeking buyers for a portfolio of non-performing loans (NPL) with a face value of more than €500 million and two smaller portfolios of NPL, people familiar with the matter told Bloomberg on condition of anonymity. The same sources added that Bankinter expects to complete the sale by the third quarter. According to the US agency, a Bankinter spokesman declined to comment on the deal.

Spanish banks are trying to shed billions in loans as higher interest rates threaten to take a toll on the economy and push more people into default. CaixaBank is also in the market with portfolios valued at around €1.1 billion, while BBVA sold a €500 million package last year.

Bankinter’s proposed deals are part of its ‘minimum NPL ratio strategy’ and are ‘a top priority’ this year, according to a marketing document accessed by Bloomberg. The large portfolio Bankinter is trying to sell consists of loans to 50,000 former credit card holders, according to the marketing document.

Bankinter’s consumer finance unit had a total of €4.7 billion in loans outstanding at the end of the first quarter, of which €1 billion was granted through debit and credit cards, according to a presentation to investors.

The second portfolio marketed by Bankinter contains mortgages secured by individuals and small businesses, and the third is made up of mortgages linked to multicurrency loans, some of which carry potential legal issues, according to the document seen by Bloomberg. The two packages have a combined face value of about €40 million.

Bankinter faces claims for its multicurrency loans that could cost it as much as €146 million, according to an estimate in its latest annual report. The bank has also made provisions of €77 million for legal proceedings for ‘usurious interest rates’ through its revolving credit cards and consumer loans.

Original Story: Cinco Dias | Author: Bloomberg
Edition and translation: Prime Yield

Banco Santander has sold one of its most anticipated projects to JP Morgan. This is the Zeta project, which consists of loans to large clients in the hotel sector. The US company will pay around 200 million. The operation was carried out at a discount of one third, as the perimeter of the loans was worth 300 million.

According to El Confidencial, the Spanish group is thus removing the loans granted to hotels from its balance sheet. Although they are now up to date with their payments, they have all been in arrears for more than 90 days. In this way, it avoids future provisions on these loans and the need to deal with defaults.

Santander was advised by EY and A&O Shearman, while JP Morgan was advised by Colliers and Linklaters. Other funds such as Apollo, Starwood and Spanish group SVP also showed interest during the process. Santander’s NPL ratio stood at 3% in March 2024, down 19 basis points from a year earlier. The coverage ratio (provisions to NPLs) was 49.8%.

Santander also overtook BNP as the most capitalised bank in the European Union. This milestone came about because BNP Paribas’ share price on Tuesday discounted the dividend it will pay in the near future. When shares are quoted ex-dividend, there is always a downward adjustment in their value.

Original Story: El Confidencial | Author: Óscar Giménez
Edition and translation: Prime Yield  

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
Edition: Prime Yield

Spain’s bad bank Sareb (Sociedad de Gestión de Activos procedentes de la Banca), has sold a portfolio of non-performing loans (NPL) without associated mortgage guarantees, valued at €1.5 billion, to the Norwegian fund Axactor, which specialises in this type of operation.

As confirmed to EFE by Sareb sources, who did not disclose the proceeds of this operation, this is the second portfolio that the company has sold to this company, after transferring another one last year valued at €3 billion.

These are loans granted by the former savings banks to property developers, which remained unpaid when these companies went bankrupt and which are difficult to sell because they are not backed by any property or mortgage guarantee.

For this reason, the company has opted to package them in order to facilitate their purchase by this type of fund, which specialises in their recovery.

Sareb, which was created in 2012 to manage and sell the troubled assets of the former savings banks that received public aid, lost €2.198 billion in 2023, 46% more than in the previous year, due to capital losses on the assets sold, i.e. the differences between the book value of the assets and the selling price, and the increase in financial expenses.

However, the company managed to increase its income by 16%, to €2.748 billion, and to repay more than €1 billion euros of its debt, to around €29 billion at the end of 2023.

Original Story: Investing
Edition and translation: Prime Yield

CaixaBank Group posted an attributable net profit of €1.01 billion in the first quarter of 2024, up +17.5% vs. the €855 million registered in the same period of 2023, as it leverages its financial and commercial strength, which has allowed it to continue supporting families and businesses.

The NPL ratio was virtually unchanged in the quarter and below the sector average, at 2.8% (compared to 2.7% in December 2023) after applying stricter criteria for the classification of non-performing loans (NPL) within the prudential framework, thanks to rigorous and prudent management of credit risk. NPL increased slightly to €10.79 billion, with no discernible signs of deterioration in the organic evolution of credit exposures. Provisions for insolvency risk (€7.67 billion) brought the coverage ratio to 71%. Meanwhile, the cost of risk (trailing 12 months) remained low at 0.29%.

CaixaBank Group also has an optimal liquidity position, with €157.02 billion, and the Liquidity Coverage Ratio (LCR) stood at 197% as of 31 March, well above the regulatory minimum requirement of 100%.

As for the Group’s capital position, the CET1 capital ratio stood at 12.3% following the impact of the new €500 million share buyback programme that began in March (-22 bps) and which has now been fully deducted. On the other side, the solid organic capital generation in the first quarter stands out (+36 bps).

CaixaBank Group serves 20.1 million customers through a network of over 4,100 branches across Spain and Portugal and has more than €600 billion in assets.

Gonzalo Gortazar, CaixaBank’s CEO, has highlighted that “in the context of a resilient Spanish economy, at CaixaBank, we started 2024 with intense commercial activity and market share gains, while maintaining solid levels of profitability and efficiency”.

The CEO has underscored that “in these first three months of the year, CaixaBank has registered €1.13 billion in taxes, a figure that exceeds the profit obtained in the period. Out of those, €493 million correspond to the banking tax, 32% more than last year”.

Evolution of the income statement
CaixaBank’s income statement for the first quarter of 2024 with growth in all margins, reflects the strength of the bank and its positive business dynamics, with higher loan production and positive net inflows into wealth management products, in a context of interest rate normalisation.
As a result, gross income rose +12.7% year-on-year to €3.5 billion, on the back of higher net interest income (+27.4%), which reflects the impact of new production and the prevailing interest rate backdrop.
Revenues from services (wealth management, protection insurance and banking fees) amounted to €1.2 billion in the first quarter, +1.3% year-on-year following an increase in activity. The growth in revenues from wealth management (+15.8%) and protection insurance (+6.9%) offsets the decrease of banking fees (-10.8%), which were down, among other factors, due to lower account maintenance fees.
As a result, return on equity (ROE) stood at 13.4% at the end of March and the cost-to-income ratio improved once again to reach 40.3%.

Business volumes at an all-time high
Strong activity in the quarter cemented CaixaBank’s status as the leading financial institution in Spain and brought the bank’s business volume close to the one trillion-euro mark, an all-time high, after growing by more than €15 billion in the last year.
Customer funds amounted to €636.49 billion, up €6.16 billion in the quarter (+1%), underpinned by wealth management products.
On-balance sheet resources remained stable in the quarter at €463.51 billion and assets under management totalled €168.69 billion (+4.9% in the quarter), following the solid performance of the markets and significant inflows.
Net inflows into mutual funds, savings insurance and pension plans reached €3.44 billion between January and March, with money market funds being the main growth driver on the funds side. Meanwhile, protection insurance continued to perform well, with premiums growing +8.7% year-on-year.
The performing loan portfolio remained stable in the period at €344.44 billion (+0.1%). Mortgages continue to be affected by repayments, albeit at a slower pace. This factor, together with the growth in new production, allowed the registered decline (-0.7%) in the first quarter to be the smallest in the last five quarters. The consumer loan portfolio was up +2%, while the loans to business portfolio rose by +1.1%.

New loan production picked up during the period
Commercial activity remains buoyant, picking up the pace starting in late 2023 and speeding up into the first quarter of 2024, with significant growth in new loans to individuals. In particular, new mortgage lending amounted to €2.79 billion in the first quarter of 2024, up +24.1% year-on-year, while new consumer lending stood at €3.03 billion, up +15%.
New production in loans to businesses exceeded €10.5 billion through to the end of March, with 43,000 loans granted to SMEs during the quarter (+28% year-on-year).

Spain’s biggest international bank Santander signalled higher profitability this year as growth in lending income, particularly in its home market, helped drive first-quarter earnings higher.

The bank’s revenue rose 10% to a record high 15.38 billion euro, above the 15.06 billion analysts had expected.

The euro zone’s second-biggest bank by market value relied in the past on Latin America for revenue growth, but has recently also benefited from higher European interest rates.

“It has been a very strong start to the year… supported by good growth in net interest income in Europe and the Americas,” Executive Chair Ana Botin said in a statement.

The bank is “well on track” to meet its targets for the year, including a return on tangible equity (ROTE) of 16%, she added.

Chief Financial Officer Jose Garcia Cantera told analysts on call that would imply ending 2024 with a net profit above 12 billion euros.

Including the 335 million euro impact of the Spanish banking levy in Spain, ROTE already stood at 16.2%, compared with 14.9% reported in the quarter.

Net profit jumped to 2.85 billion euros in January to March, just short of the 2.87 billion expect by analysts.

Overall net loan provisions rose 9% while the cost of risk, which measures potential losses, rose 2 basis points to 120 bps.

LENDING BOOST IN SPAIN

At a group level, net interest income (NII) – earnings on loans minus deposit costs – rose 17.7% to 11.98 billion euros, above the 11.5 billion that analysts expected.

Against the previous quarter, NII rose 7.7% as euro zone interest rates remained higher for longer than expected, helping its Spanish business, which has been charging more on loans while keeping a lid on rates paid to savers.

Net profit in Spain rose 66%, while NII was up 24%.

In Brazil, net profit rose almost 20% despite higher provisions as net interest income increased by 25%.

The U.S. and the UK were weak spots, with net profit in the U.S. falling 6.8% due to higher investment costs and NII down 4.7% due to higher funding costs. In the UK net profit fell 22.8%.

Santander’s Tier-1 fully loaded capital ratio, the strictest measure of solvency, rose to 12.28% from 12.26% in the previous quarter.

Original Story: Reuters | Author: Jesus Aguado
Edition: Prime Yield

The volume of doubtful loans in February was €42.248 billion, according to the Bank of Spain. In February last year the rate was 3.55%.

Non-performing loans (NPL) granted by all credit institutions to companies and individuals stood at 3.62% in February, barely one hundredth of a percentage point higher than the 3.61% recorded in January, although higher than the 3.55% recorded a year earlier, according to data published by the Bank of Spain.

The volume of doubtful loans in February was €42.248 billion, a figure that has risen by 144 million (+0.34%) compared to January. Compared with a year earlier, the volume of doubtful loans fell by 0.81%, €347 million less.

At the same time as this increase in doubtful loans, there was no change in the total amount of credit granted. In February, banks registered €1.135 billion in loans, barely one million euros less than in January. Moreover, it is €33,494 billion less than in February 2023.

The data broken down by type of institution show that the doubtful assets ratio of all deposit institutions (banks, savings banks and cooperatives) closed January at 3.52%, up from 3.50% the previous month, and also up from 3.46% a year earlier.

The NPL ratio of financial credit institutions stood at 6.59% in the second month of the year, up from 6.53% in January, and also up from 6.04% a year earlier.

According to data from the Bank of Spain, the provisions of all credit institutions rose to €30.026 billion euros in February, an increase of 96 million euros compared with the previous month.

Original Story: Idealista News
Edition and translation: Prime Yield