Credit granted to construction companies fell by 2.4% in 2021, following the general trend in business financing, according to the report ‘Evolución del crédito a empresas por sectores de actividad en España 20210, published by AIS Group, a consultancy firm specialising in the application of artificial intelligence solutions to risk management.

The report puts the balance of the credit portfolio in this sector at 27.235 billion euros in 2021, which is up to 660 million euros less than in the previous year, with construction being the sector that has most accelerated the decline in the need for financing.

According to the study, the indebtedness of construction companies is returning to the downward trend that began in 2008 and was only interrupted in 2020 due to the arrival of the coronavirus, when it grew by more than 7%.

As far as defaults are concerned, the trend has also been downward for decades and the pandemic has not reversed it either. Specifically, as of December 2021, the balance of non-performing loans (NPL) granted to construction companies had fallen by around 250 million euros, to just over 2.3 billion euros.

In any case, despite the fact that its portfolio of doubtful loans continues to shrink, construction reaffirmed its position in 2021 as the sector with the highest NPL ratio, at 8.5%. The Bank of Spain has already issued repeated warnings in recent months that institutions should be very vigilant because a considerable increase in NPLs is expected in the short term.

Original Story: Original Story: El Confidencial Digital |Europa Press 
Photo: Photo by Svilen Milev in FreeImages
Edition and translation: Prime Yield

One of the main operators in Southern Europe in the field of credit and real estate investment management for banks and creditors, the DoValue group has announced  its subsidiary Altamira Asset Management has formally set up a business unit dedicated to the management of Non-performing Exposures (NPE) related to Small and Medium Enterprises (SME) in Spain and “that it is significantly investing in its development”.

The SME business unit employs about 40 professionals and is currently managing approximately €3 billion of Gross Book Value (GBV), “a level which is expected to grow over the next few quarters”, the group informs. Whilst the current GBV is mainly composed of Non-performing Loans (NPL), as part of the development of the SME business unit is to further expand also in the Unlikely to Pay (UTP) and Early Arrears segments.

In a press-release, DoValue adds that “the key strengths of the SME business unit are its broad territorial presence (which mirrors the granularity of the SME segment), the fact that it is fully integrated with the doValue Group from a technological and IT systems point of view and that it can leverage on the Group best in class practices already well developed in Italy and in Greece”.

Original Story:  Market Screener |PR
Photo: Do Value website
Edition: Prime Yield 

Banco Sabadell is looking for a candidate to buy a further portfolio of non-performing loans (NPLs) with a total value of 1,000 million euros, market sources have confirmed to Europa Press.

It would be a portfolio made up of equal parts of failed consumer loans and doubtful loans granted to companies, although it was contracted prior to the Covid-19 pandemic.

The bank would have put this portfolio up for sale in April, although it would be mid-June when the entity would begin to receive offers for it.

According to ‘El Confidencial’, which has advanced the news, the bank is also reorganising the management of unpaid loans by uniting the areas of recoveries and construction of doubtful portfolios under the same management.

Original Story:  Idealista |Europa Press 
Photo: Sabadell website
Edition: Prime Yield

Doubtful debts of credit institutions increase and are close to €3 billion. Banks suffer the first increase in defaults in this way.

 The possibility of non-performing loans (NPLs) spiralling out of control is one of the biggest threats in the financial sector since the coronavirus began. For now, it is contained in banking, but there is already a path of increase in consumer credit, where the default has reached 7% – the highest level since 2016, according to the latest release from the Bank of Spain.

The report, which covers the period up to March, demonstrates that NPL in credit financial institutions rose by 5.5% monthly, to €2.982 billion, against a total credit stock of €42.096 billion. This is therefore an NPL ratio of 7.08%, up from 6.88% in February, and the highest level since May 2016.

CBEs account for a large part of consumer credit, although not all of it, but the segment’s NPLs figure serves as an approximation of the trend. These establishments are companies with their own legal status that are part of banking groups, or in some cases are independent firms, which are dedicated to granting personal loans.

However, the perimeter of consumer credit is larger. While in the banking sector as a whole it remains contained, with €51.485 billion in doubtful loans and an NPL ratio of 4.24% in March, lower than in February, there has been an upturn in consumer credit. Non-payments increased in December, during the Christmas sales campaign, marred by the omicron. That month it rose from 6.56% to 6.89%, and now it has risen again. 

Before the pandemic started, in February 2020, the default rate was 5.81%. Thus, there is an increase of more than one percentage point. You have to go all the way back to May 2016 to find a higher record in the historical series, although it is still far from the historical highs of over 11% in 2014.

These consumer loans are not secured by mortgages or other collateral, and recoveries are more difficult. Banks often bundle defaults into portfolios and sell them to opportunistic funds at discounts of up to 95%. In this sense, there is an appetite for funds to buy this year, after two years with less activity.

Experts were already anticipating that the first upturn in defaults should come in consumer credit. The question is when we will see the increase in companies, and whether it will reach mortgages, for which the economy would have to continue to deteriorate in the midst of a change in the monetary policy cycle with interest rate rises. 

The unknown is in the business sector, where there has been an increase in debt with the ICO loans that kept many companies afloat. Some healthy and others that were no longer sustainable and could become zombie companies. Default is almost frozen in companies with the bankruptcy moratorium, which expires on 30 June, but for which it is not yet known whether there will be another extension. The Bank of Spain estimates that 20% of ICO loans are under special surveillance by banks.

Original Story:El Confidencial |Oscar Gimenez
Photo: Photo by Pablo Rodríguez from FreeImages
Edition and translation: Prime Yield

The combined weight of NPL accounts for 24% of those granted to the sectors most affected by the pandemic.

The Bank of Spain’s Financial Stability Report confirms that loans under special surveillance have grown by 14% at the end of 2021 compared to 2020. “The ratio of loans under special surveillance continued to increase, particularly in the sectors most affected by the pandemic, where the nonperforming (NPL) loans ratio also increased slightly,” explains the regulator’s spring report.

A credit is classified as NPL when it accumulates defaults of more than three months or for an amount exceeding 25% of the debt. Its predecessor is credit under special surveillance: these are those in which, even though no default event has occurred, a significant increase in credit risk has been observed since the time of granting. According to the Financial Stability Report, the combined weight of NPL and loans under special surveillance accounts for 24% of the credit granted to the sectors most affected by the pandemic, 18% in the moderately affected sectors and 15% in the remaining sectors. 

Original Story: Diário Siglo XXI | Press
Photo: Photo by Victor Iglesias in FreeImages
Edition: Prime Yield
 

Caixabank raised its key profitability target for 2024 and announced a €1.8 billion share buy-back programme, expecting higher interest rates and economic recovery to boost banking revenue.

As part of a new strategic plan, Spain’s biggest domestic lender by assets said it planned to grow revenue by around 7% between 2022 and 2024, driven by an increase in insurance income and moderate growth in fees and commissions.

Against this backdrop, Caixabank targeted a return on tangible equity ratio (ROTE), a measure of profitability, of above 12% by 2024 from an adjusted 7.2% at the end of 2021.

The lender forecast Spain’s economic growth at an average 3.4% over the three years of the plan, boosting demand for mortgages and consumer loans.

It said that while the war in the Ukraine and its effects on energy prices would slow the pace of recovery in the short term, that would be offset by the return of foreign tourists, the normalisation of saving rates and the roll-out of EU funds.

Spanish banks, with a purely retail model, have been among the hardest hit by ultra low interest rates and are expected to benefit from tighter monetary policy.

Caixabank said it expected the 12-month Euribor rates curve to rise from an average of -0.5% in 2021 to 1.5–1.6% in 2023–24.

Net interest income – earnings on loans minus deposit costs – would rise by 8% in the period, the bank said, while its cost-to-income ratio would fall to below 48% from 58% at end-2021 thanks also to cost savings from its Bankia acquisition.

Higher cost of risk, BPI to grow revenues 9%

The bank plans to generate capital of around €9 billion, including a dividend payout policy of more than 50%, a €1.8 billion share buy-back to be distributed this year, or 7.7% of its outstanding capital, and solvency excess over 12%. The bank has a capital target of 11% to 12%.

Broker Jefferies said that revenue upsides would be partly offset by costs, with the bank targeting costs of 6.3 billion in 2024 versus consensus expectations at €6.0 billion and a step up in provisions.

Caixabank expected cost of risk, which measures the cost of managing credit risks and potential losses for the bank, to be lower than 35 basis points by 2024 from a target of around 25 basis points for this year.

The bank said its Portuguese subsidiary BPI is expected to grow revenues at an annual average rate of around 9%, with profitability and efficiency converging with those of the whole group.

Original Story: Reuters | Jesús Aguado 
Photo: Caixa Bank website
Edition: Prime Yield

Spain’s Caixabank adequate provisions to face potential future losses given the current market uncertainty, the bank’s Chief Executive Officer Gonzalo Gortazar said.

“At the end of 2021, the unallocated amount of the pandemic-related provision is more than €1.4 billion, so we are comfortable with the existing cushion to absorb any losses that might happen,” Gortazar told shareholders during the bank’s annual meeting.

Caixabank’s pandemic-related provisions fell by around a fifth in 2021 compared to the previous year, boosting the lender’s recurrent net profit by more than 70%.

The Bank of Spain is monitoring the evolution of state-backed loans granted in the pandemic as repayment freezes are lifted and indirect impacts from the Ukraine war show up in credit portfolios.

The central bank’s Director General for Supervision Mercedes Olano said that she expected an increase in bad loans but that should be manageable as Spanish banks’ exposure to Russia was limited.

Gortazar told investors that Caixabank was confident that credit quality this year would remain at “very adequate” levels.

At the end of December, the bank’s non-performing loans (NPL) accounted for 3.6% of total lending, in line with the previous quarter.

Shareholders are expected to approve a gross cash dividend of 0.1463 euros per share against 2021 earnings, representing a 50% pay-out. 

Caixabank aims for a dividend cash pay-out policy of between 50-60% of 2022 consolidated earnings.Investors will also be asked to approve a reduction of the group’s outstanding share capital of up to 10%.

Original story: Reuters | Jesus Aguado 
Photo: CaixaBank website
Edition: Prime Yield

The Bank of Spain told lenders to adequately monitor credit risks of some of their customers most exposed to the economic impact from Russia’s invasion of Ukraine and urged banks not to release provisions given the current uncertainty.

“In view of the new shock, we will have to closely monitor the effects of the crisis on institutions and their borrowers,” Bank of Spain Governor Pablo Hernandez de Cos said in the presentation of the central bank’s supervisory report.

He said lenders needed to maintain a high degree of prudence, with “appropriate and early recognition of the associated risks, in order to preserve confidence in the sector and to facilitate the continued flow of credit to the economy”.

Last April 5^th, the central bank lowered its economic growth forecasts for 2022 and 2023.  

Deputy Governor Margarita Delgado warned in the report that “it is important that lenders…do not release provisions until uncertainties dissipate.”  

Spanish banks such as Santander and Sabadell have recently started to release provisions, mainly in the United States and Britain.

Although Spanish lenders have little exposure to Russian credit, estimated at just above €700 million by the central bank, they fear an indirect impact of high energy prices on some of their customers. 

Analysts have also warned that the conflict could delay interest rate hikes in the long run, and Delgado said it was “difficult to establish clear scenarios for the evolution of interest rates”.

She saw a more limited scope for further domestic mergers but growing chances of cross-border deals in Europe. The number of significant lenders in Spain has dropped to 10 from 55 before the 2008 financial crisis.

Despite a significant rise in property prices in 2021, De Cos did not see any evidence of a “clear overheating in the Spanish real estate sector”, but said the bank would closely monitor its performance. Spain’s property price index rose 6.4% in the fourth quarter, the biggest increase since early 2019.

Original story: Reuters | Jesus Aguado 
Photo: Bank of Spain website
Edition: Prime Yield

Spain’s state rescue fund FROB has increased its stake in the country’s “bad bank” Sareb to more than 50%, in line with a European Union order to count its liabilities as public debt.

FROB said it had bought a 4.24% stake in Sareb, set up in 2012 to take on bad loans after the financial crisis, to raise its holding to 50.14%. No price was given but several sources with knowledge of the matter said it was merely symbolic.

The move comes after the government in January approved a legal framework allowing FROB to surpass the 50% threshold in Sareb following the EU order.

FROB didn’t say which banks had sold their stakes but a source at Sareb said some smaller holders, such as Bankinter, had tendered their stakes. Bankinter declined comment.

Santander remains the biggest private shareholder with a 22.2% stake, followed by Caixabank with 12.2%.

Several Spanish banks have been planning to sell their stakes in Sareb, which has struggled since its creation as a slump in real estate prices has depressed the value of loans and assets, but most had retained their holdings for tax reasons.

After selling 17.1 billion euros of all debt issued, Sareb still holds 33.7 billion euros in senior debt.

Original story: Reuters | Jesús Aguado 
Photo: Sareb Linked IN
Edition: Prime Yield

The Spanish banks are monitoring about €50 billion in loans guaranteed by the Official Credit Institute (ICO) granted to companies from problematic sectors, for fear of non-payment. This is the equivalent to one out of every two euros lent by the sector with the public guarantee, according to data handled by the consultancy firm Axis Corporate.

The firm points out that 50% of the total financing provided with ICO guarantees is concentrated in five economic sectors that, by their nature, “have been significantly affected by the pandemic”. 

Specifically, of the €50 billion, €14.8 billion come from the tourism, leisure and culture sector, €10.7 billion from the construction and infrastructure area, €8.8 billion from business and professional services, €8.2 billion from capital and industrial goods and €7.6 billion from food and beverage distribution.

The data compiled by Axis Corporate warns that part of these credits “are deteriorating quite rapidly”. Thus, it points out that in the sectors most affected by the pandemic there has been an increase in the rate of doubtful credit of 30% compared to the previous half-year (with data to half of 2021) and expects this growth to continue to increase in the coming months, which would explain why the Bank of Spain has been reluctant to financial institutions to release provisions.

In addition, Axis Corporate has found that more than 40% of the companies that have requested ICO guarantees to meet their obligations required changes of term and/or grace period, as they were unable to comply with them, and the payment time in the private sector “has grown significantly” throughout 2021, to stand at over 90 days.

“Although this delay in payment has become commonplace in our economy, 27% of companies see the viability of their business compromised if payment delays become structural. Another particularly worrying figure is found in the ratio of non-payment of invoices, which has risen from 3.1% in 2019 to 5.4% in 2020 and 4.8% in 2021, which, if not corrected, would mean an increase in the non-fulfilment of companies’ financial obligations”, the consultancy firm warned.

Axis warns that this situation is aggravated by the current economic situation, with inflation soaring, energy costs at record highs and the war in Ukraine.

Although the government is planning to make available to the most affected sectors another line of guarantees amounting to €10 billion of the €36 billion still available from the line of guarantees of the coronavirus, as well as extending the maturity of loans guaranteed by the ICO and the grace period for the most affected sectors, the firm argues that, “if there are no drastic changes in the economic environment, these measures may only succeed in delaying beyond the second quarter of 2022 the massive influx of defaults”.

Original story: Europa Press| Europa Press | 
Photo:Photo by Pablo Rodríguez on FreeImages
Translation and edition: Prime Yield

Spain is planning a consumer protection authority which aims to ensure banks and other financial institutions meet obligations towards customers, responding to complaints of unfair mortgage lending, and financial exclusion, particularly of the elderly.

Economy Minister Nadia Calvino acknowledged a shift towards online banking which accelerated during the pandemic had left part of the population more exposed to financial exclusion.

“(Financial services) is the area with the highest number of complaints from citizens, and one that has a very high degree of litigation,” Calvino told a media briefing.

The new authority, whose creation is set out in a draft bill, will bring together functions previously performed by the Bank of Spain, supervisor CNMV and the Directorate General for Insurance and Pension Funds.

It will take on those bodies’ responsibilities in the regulation of financial entities, investment companies, payment companies, and so-called fintechs or providers of cryptoassets.

In Spain, codes of good practice have had mixed success in the past, as in the case of mortgage contracts, where lenders were given room to directly renegotiate terms with clients. Mortgage complaints still account for the lion’s share of those filed with the Bank of Spain.

The independent financial customer ombudsman authority will fall under the umbrella of the Economy Ministry and will be free of charge for financial customers. It will be financed through a fee estimated at 250 euros, levied on the financial firm involved, for each accepted complaint.

Original story: Reuters | Staff 
Photo: Photo by Victor Iglesias on FreeImages
Edition: Prime Yield

Spanish banks slightly tightened the criteria for granting loans in the last months of 2021 and this trend seems to have continued at the start of the 2022 financial year, at least for companies, as credit to companies fell by 0.8% month-on-month in January, with 7,669 million euros less.

However, credit granted by financial institutions to companies rose by 1.05% year-on-year, to 931,989 million euros, adding 9,698 million euros as a result of the injection of liquidity measures approved by the government since the start of the pandemic, such as the 140,000 million ICO guarantees to deal with the impact of Covid-19.

Likewise, financing to households and non-profit institutions resident in Spain rose by 1% in January to 700,769 million euros, adding 6,933 million euros in a single year, and managed to hold steady at the start of the year, with just 778 million up (+0.1%) on December, according to data published on Tuesday by the Bank of Spain.

All this after the 2021 financial year closed 2021 with six-year highs in financing to companies (939,658 million euros), while it rose to families per omicron to around 700,000 million euros.

Maintenance of conditions in the first quarter

In the fourth quarter of 2021, the criteria for granting loans would have tightened slightly in Spain across the board, according to the latest bank lending survey of the supervisory body, and the data show that this trend would have continued at the start of 2022, especially for companies.

Banks do not want to make the mistakes of the past and have been gradually tightening the criteria for granting financing, especially in the retail and non-residential real estate sectors, although they have not turned off the tap in these areas, as credit continues to flow but loans are subject to stricter conditions as a precautionary measure to control default.

Looking ahead to the first quarter of 2022, the Spanish institutions surveyed do not expect significant changes in the supply of credit, so they anticipate that lending criteria will remain stable and that demand will grow, albeit at a “very moderate” rate.

Consumer credit falls and mortgages rise

The slight upturn in household credit is due to the increase in mortgage loans, which amounted to 514,738 million euros in January, up 76 million on a monthly basis and 5,289 million on a year-on-year basis (+1). Even so, mortgage credit still represents 73.45% of the total.

Household consumer loans fell by 3.4% month-on-month, with 3,229 million less, to 92,010 million euros, but on a year-on-year basis they rose by 0.5%. This monthly decline may be influenced by the increase in the savings rate, which reached record highs last year, and the pent-up demand that could gradually be uncorked in the coming months. There was also an increase in lending for “other purposes” to 91.237 billion from 87.324 billion in December.

On the other hand, on financing to companies, which leaves behind the maximum levels since 2015 that it had registered months earlier, the decline in loans from credit institutions to companies stands out, as they fell in a single month by 8,288 million euros (-1.7%), to 479,147 million euros, with a year-on-year decrease of 1.2%, as 5,803 million euros less were granted.Debt securities rose 11.2% year-on-year and 0.4% month-on-month to 143.142 billion euros. At the end of the first month of the year, foreign loans had grown by 0.3% year-on-year and were practically unchanged from December, with a total of 309,701 million euros.

Original Story: Economia digital| Sérgio Diago 
Photo: Photo by Pierre Amerlynck from FreeImages.com
Translation & Edition: Prime Yield

Spanish banks have taken off their balance sheets some 128 billion euros in bad loans related to real estate since January 2015, according to the consultancy firm Debtwire. They have some €47 billion left, 27% of what they accumulated six years ago. The default rate in this period has plummeted from 12.5% to 4.3%, according to the Bank of Spain.

The managers of Spanish financial institutions set themselves the great mission of eliminating toxic assets from their balance sheets. The amount stood at around €175 billion seven years ago, so they still hold 27%. This figure does not include the €51 billion, including loans and real estate, that Spain’s bad bank Sareb absorbed from the banks that received aid between 2012 and 2013.

Amongst the latest largest portfolios put for sale, there are those from Santander, BBVA and CaixaBank; accounting for a nominal amount of around €3,500 million. A common formula used by financial institutions to reduce non-performing assets is to transfer them to so-called servicers, specialised in this task. Haya Real Estate (controlled by Cerberus), Solvia (Intrum), Altamira (doValue), Servihabitat (Lone Star), Aliseda (Blackstone) and the Spanish firm Hipoges stand out among these companies.

But there have also been sales of NPL portfolios, and of pure and simple bricks and mortar assets , in bilateral transactions, with large institutional investors acquiring these assets with price discounts of up to 90% off its nominal value in the most extreme cases. Institutions prefer to pocket a small amount of these loans as long as they do not allocate resources to their collection.In the best cases, they can even release provisions that they had been setting aside, which are directly recorded in the profit and loss account. The NPL ratio has plummeted to one third of the level at the end of 2014 thanks to the measures taken. But even so, the ratio is more than double the 2.1% recorded on average in the sector in Europe.

Original Story: Cinco Dias | Pablo Martín Símon / Ricardo Sobrino 
Photo: Photo by Svilen Milev in FreeImages.com
Translation and Edition: Prime Yield

Spanish banks are keeping the nonperforming loans (NPL) ratio of their loan portfolio stable and are facing the first quarter of the year with a positive outlook. Specifically, the NPL ratio for loans granted by banks ended 2021 at 4.29%. The NPL ratio has not been at such a low level since the end of 2008, when it ended at 3.37%. On a monthly basis, this is the lowest NPL ratio since March 2009, when it stood at 4.26%.

According to data published by the Bank of Spain, the outstanding loan portfolio at the end of December totalled 1,223 trillion euros, as total credit in the sector fell by 0.06%, slightly down from 1,227 trillion the previous month, and the total volume of doubtful loans fell by 4.77% to 52,531 million euros, some 60 million less. Compared with the end of 2020, the NPL ratio fell from 4.51% at that time to 4.29% in December 2021 and the balance of NPL fell by more than 2.6 billion euros.

The NPL ratio of banks, savings banks and cooperatives fell in December, from 4.22% in November to 4.21% at the end of 2021, also its lowest level since March 2009. The December rate was unchanged from a month earlier, with a 0.27% decline in the sector’s total lending and a 0.11% drop in the balance of non-performing loans in the last month of the year. This fall in deposit institutions’ NPL occurred despite the fact that the loan portfolio fell slightly, to 1.173 trillion, thanks to the fact that the balance of defaults did so to a greater extent, to 49,361 million.

Meanwhile, the NPL ratio of financial credit institutions stood at 6.89% at the end of 2021, its highest level since August 2020, with NPLs at 2.948 billion, up from 2.737 billion in November, and a loan portfolio that grew to 42.783 billion, up 38 basis points on the year and 33 basis points from the previous month.

With regard to the provisions of credit institutions – the so-called capital buffer with which institutions face possible impairment or insolvency – these broke in December with three consecutive months of decline and rose to 38,504 million at the close of the 2021 financial year, a decrease of 1,339 million (-3.36%) compared with a year earlier, but an increase of 227 million (+0.59%) compared with November. Provisions for deposit institutions as a whole stood at 36,083 million in December, down 1,214 million in the year (-3.25%) but up 250 million in the month (+0.7%).

The figures offered by the Bank of Spain include the methodological change in the classification of Financial Credit Establishments (EFC), which since January 2014 are no longer considered within the category of credit institutions. Excluding the change, the NPL ratio would stand at 4.4%, since the credit balance was 1.191 trillion euros in December, excluding the credit of the EFCs.

Original Story: La Razon |Javier de Antonio
Photo: Photo by Victor Iglesias from FreeImages.com
Translation & Edition: Prime Yield

Radical change in Sareb’s partners. Spain’s Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria (SAREB) has chosen KKR (through its Spanish company Hipoges) and the Blackstone fund (through its asset managers Aliseda/Anticipa) as the new servicers that will manage its €25.3 billion mega-portfolio of real estate assets and loans.

In this way, the bad bank leaves out its traditional partners after calling a tender with which it sought to save costs. Haya (Cerberus fund), Altamira (doValue) and Solvia (Intrum) have lost this mega-contract. In addition, Servihabitat (Lone Star) had already dropped out of the first part of the tender by submitting the most expensive bid.

In the coming weeks, Sareb will finalise the portfolios to be managed by each of the two winners. As of 1 July, they will take over from the outgoing managers. The portfolios comprise 13,300 million in unpaid developer loans and 12,000 million in residential real estate, land and tertiary assets, all of which are toxic assets from the banks during the brick crisis.

On the decision to choose the new servicers, the proprietary directors who represent the financial institutions on the board of directors have not been involved in the voting, according to sources close to the process, and have left the approval in the hands of the chairman Javier García del Río, the independent directors and those of the FROB (dependent on the Ministry of Economy).

The main objective in calling the tender is to reduce the annual bill it pays to the servicers for the management of its portfolio, which has an annual cost of around 160 million. The entity calculates that with the proposals from Hipoges and Aliseda/Anticipa it saves around 20% compared to the contracts signed in 2014 and 10% compared to the one signed with Haya in 2019.

The financial institution has decided to reduce the number of fund managers to two in order to, in exchange for reducing the margins paid, give a greater volume of business to the winners.

The contenders in this tender had to first submit an economic offer, after which Sareb rejected Servihabitat, and a technical offer. The institution chaired by Del Río considers that Hipoges has enormous professional capacity, with the greatest diversification of clients in the country. Of Anticipa/Aliseda (Blackstone companies that have presented themselves jointly), it values their robust capacity to manage large portfolios. “Both have first-class technological platforms to provide an optimal service to Sareb”, according to Sareb.

It is now a complicated process for the losers of the tender, since, given the size of the portfolio under management, Sareb is one of the largest clients in terms of volume for all of them. The project has been supervised by an independent auditor, Mazars, which has validated the integrity and good execution of the process, according to Sareb.

A closing phase is now underway with the two selected bidders. In the event of any setback in the final negotiation, Sareb’s board could decide to move forward with the next candidates in the order of scoring, as all bids have been considered valid.

The bad bank also has other partners for different tasks. In the case of urban development, it has Servihabitat, through its subsidiary Serviland, as manager. For the completion of stalled works, it partnered with Domo, and in the case of residential development, it launched the developer Árqura, managed by the real estate company Aelca (of the Värde Partners fund).

“We are very pleased to have been chosen by Sareb as one of the companies that will manage its portfolio of more than 25 billion euros of real estate assets and loans. It is a great challenge for Aliseda and Anticipa”, say these Blackstone companies, whose CEO is Eduard Mendiluce.

Original Story: Cinco Dias |Alfonso Ruiz
Photo: Sareb website
Translation & Edition: Prime Yield

The number of housing loans  signed in Spain increased by 24.1% last November.

With the end of the sixth wave of the coronavirus pandemic finally in sight, the global economy is strengthening day by day and nowhere is this more evident than in the property market in Spain, which has been improving in leaps and bounds. 

The number of mortgages approved in Spain increased by 24.1% year-on-year last November, making this the strongest month since 2010. A total of 36,220 home loans were signed, according to latest data released by the National Institute of Statistics (INE).

These figures reflect the impressive rebound of the Spanish real estate sector, which closed out last year with some 400,000 loans, making 2021 “the best mortgage year of the last decade” according to the experts. 

November’s figures follow nine months of consecutive increases. The average amount of home mortgages sought jumped by a substantial 1.5% to 138,189 euros, while the capital granted also grew by 26% to 5,005 million euros. The majority of the loans were granted in Andalucía (7,583), Catalonia (6,222) and the Community of Madrid (5,682).

Original Story: : Spanish News Today| News 
Photo: Big Stock Photo
Edition: Prime Yield

A new law allowing the State to own more than 50% of the divestment company may mean more council houses on private estates

After the financial crash in 2008, Spain founded the private company Sareb in 2012 to manage and liquidate bad loans and to buy up and dispose of the banks’ toxic assets, including risky stocks and real estate. This entity is currently 54.1% owned by private banks and insurance companies, and 45.9% owned by the public Fund for the Orderly Restructuring of the Banking Sector(FROB). Now, though, Spain has passed a law that will allow the State to hold a stake of more than 50% in Sareb in order to take control of the company.

Basically, the new law opens the door to allow the government to increase its stake in Sareb at the cost of the rest of the shareholders, including most of the banks, thereby reducing their power and weight in the company’s capital. This buy out may even be done for a symbolic price of just a few euros given that the institutions have been making provisions for the deterioration of their investment.

Currently, the FROB is the main shareholder with 45.9% of Sareb, followed by Banco Santander (22.2%), CaixaBank (12,24%), Sabadell (6,61%), Kutxabank (2,53%), Ibercaja Banco (1.43%) and Bankinter (1.37%), among others.

Although the State will take control of Sareb, the company will still have a specific corporate regime so that it can maintain “the necessary agility to carry out its divestment function”, although, according to a press release from the Ministry of Economic Affairs, the regime of commercial and senior management contracts will apply. 

As an alternative to selling off empty homes to private buyers, Sareb has begun diverting more of its properties to subsidised social and council housing as part of its corporate social responsibility strategy. The government now wants to strengthen this commitment, “in order to maximise the social utility of these properties and the positive impact of the company on society”. In this way, the new government takeover of a majority share in Sareb may see a larger proportion of its seized properties being repurposed for cheap council houses and flats for those unable to afford a home in Spain.

Original Story: Spanish News Today| News 
Photo: Sareb Linked In
Edition: Prime Yield

The Non-performing loan (NPL) ratio within the Spanish banking sector fell in November to 4.29%, marking a low since March 2009, according to provisional data from the Banco de España.

This downward trend is the result of a decrease in the total volume of bad loans in the bank’s sheets, which has been accompanied by an increase in total credit.

In November, the NPL ratio was 7 basis points (b.p) below the 4.36% recorded in October and 28 b.p. below the 4.57% of a year earlier. The gap is much wider than the peak set in December 2013, when it reached 13.62% of total loans.

Specifically, total credit in the sector increased by 1.03% in November to €1,226 trillion, a figure which, however, was 0.25% down on the previous year. 

The balance of doubtful loans fell by 0.73% in November 2021, to €52.6 bn. This fall was 6.37% compared with the total doubtful loans in the same month of the previous year.

Original Story: Rtve|Europa Press
Photo: Big Stock Photo
Translation & Edition: Prime Yield

Santander has already launched its new real estate ‘servicer’. The entity chaired by Ana Botín has registered the company Yera Servicer Company 2021, which will take over the management of part of the assets from Aliseda, following the agreement reached between Blackstone and the Spanish entity. 

The creation of this company is part of Santander’s internal reorganisation of the entire real estate segment. First, two years ago, it created Deva Servicer, on which this company will depend. The name of Yera is not definitive, nor is its board of directors, which is chaired by Jaime Rodríguez Andrade, together with Carlos Manzano, Juan Babio and Jaime Guasch.

What is definitive is the executive who will lead the project, Enrique Arnoso, a former senior executive of Banco Popular and Pastor who has been in charge of the Aliseda account for the last three years. Arnoso will be in charge of managing assets valued at €5 billion together with the team of 130 professionals that Aliseda is transferring to Yera.

This is a key move in the sector. Santander had not had its own servicer since it sold Altamira to Apollo in 2014. The Spanish entity holds a 15% stake in this platform, now owned by DoValue. It also has a 15% stake in Aktua, the former servicer of Banesto, now owned by Intrum, and 49% of Aliseda, Popular’s platform, in which its partner is Blackstone.

The creation of Yera means Santander is once again investing in this segment, as it did with Deva Capital, a subsidiary that advises large opportunistic funds and buys portfolios of real estate and loans from other banks. Following this agreement, Aliseda continues to focus on the management of the Quasar Project -€30 billion in assets from Popular- and on services to third parties: it is bidding for the management of Sareb’s assets together with four other servicers.

Original Story: Cotizalia| J.Zuloaga and R.Ugalde 
Photo: Santander Facebook
Translation & Edition: Prime Yield

Spain’s BBVA has closed its first balance sheet synthetic securitization of a project finance loan portfolio. This a transfer of risk to institutional investors Alecta and PGGM that allows the bank to free up 80% of the capital on a portfolio of project loans that will remain on the bank’s balance sheet.

BBVA has closed a risk sharing transaction with Alecta and PGGM for a project finance loan portfolio worth 500 million euros. This portfolio represents a variety of projects, mainly in Spain and Western Europe, with one third of the portfolio consisting in renewable energy related projects, as that has been a clear focus in BBVA origination activities. The bank retains a risk alignment of minimally 20% for each project in the portfolio.

The transaction also establishes a framework for future collaborations with institutional investors PGGM and Alecta, which rely on BBVA’s origination capabilities to continue investing and provide the bank with capital that will allow it to continue promoting projects that help combat climate change.

BBVA has been actively using credit risk sharing to capitalize their small- and medium-size lending activities, and is now expanding this to its project finance loan book. This is a further step in the sophistication of risk management in its wholesale banking business. 

Original Story: Webwire | PR 
Photo: BBVA website
Edition: Prime Yield