Santander prepares to sell €700 million of distressed commercial loans

Santander is preparing to sell €700 million worth of doubtful trade receivables, financial sources have confirmed to elEconomista. The divestment is, according to the same sources, at an initial stage and is being designed if it will be carried out as a block sale or divided into different portfolios, something that will be decided depending on the appetite of investors interested in these credits. In any case, the idea is to sell them during the course of this year.

With this operation, Santander recovers the pace of sales of non-performing loans, after a year in which the sector was at a standstill due to the pandemic. Santander’s real estate activities unit, integrated within Spain, has EUR 2,781 million in gross customer loans for real estate activity on its balance sheet, of which €924 million are classified as non-performing. Last year it only reduced €24 million of the total with portfolio sales, recoveries and subrogations by third parties, compared to the €1,685 million it reduced in 2019 or the €1,267 million in 2018.

Despite this slowdown in the drain on this type of assets, Santander closed the first quarter of the year with an NPL ratio of 3.20%, lower than in December, when it stood at 3.21%. At the level of Spain, the area with the highest NPL ratio of the whole group, it also continued to fall from December 2020 to March 2021, from 6.23% to 6.18%. This ratio could rise as the loan moratoriums granted expire. The group approved loan deferrals totalling 112 billion, of which 96 billion have expired, and of these, 5% have been classified as doubtful.

Original Story: El Economista | Araceli Muñoz and Eva Díaz
Photo: Santander Facebook
Translation: Prime Yield