Spanish banks have taken some 128 billion euros off their balance sheets in brick-related loans since January 2015, according to consultancy Debtwire. They have about 47,000 million left, 27% of what they accumulated six years ago. The delinquency rate in this period has sunk from 12.5% to 4.3%, according to the Bank of Spain.
The directors of Spanish financial entities set themselves the great mission of eliminating toxic assets from their balance sheets. The amount was about €175 billion seven years ago, so they still hold 27%. This figure does not include, therefore, the 51,000 million, between loans and real estate, that Sareb absorbed from the banks that received aid between 2012 and 2013.
The last large portfolios for sale correspond to Santander, BBVA and CaixaBank, for a nominal amount of about 3,500 million of euros. A common formula used by financial institutions to reduce non-productive assets is to transfer them to the so-called servicersspecialized 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 portfolios, and pure bricks, in bilateral transactions, which have large institutional investors who acquire those assets with price reductions with respect to the nominal of up to 90% in the most extreme cases. The entities prefer to pocket a small amount of these credits in order not to allocate resources to their collection.
in the best cases they can even release provisions that had been reserving that are recorded directly in the income statement. The delinquency rate has plummeted to a third of that at the end of 2014 thanks to the measures adopted. But, even so, the ratio more than doubles the 2.1% registered on average by the sector in Europe.
Among other names, they appear as repeat buyers Axactor, Cerberusthe canadian fund CPPIB, Metric Capital Albatris, KKR or lone star. All these firms have tentacles in this business.
The most prominent advisers are the so-called big four –Deloitte, PwC, EY and KPMG-, and Alantra in recent times, according to data from the consultants Debtwire and Axis Corporate.
The volume thickness Of all the transactions carried out in the last six years, it was carried out between 2017 and 2018, when the bank shook 54,796 and 41,552 million euros in toxic loans, respectively.
Since then, the volume has been falling year after year: in 2019 the portfolios sold amounted to 14,201 million (-65.8% compared to the previous year), in 2020 they sold 6,842 million (-51.8%, practically half) and in 2021 they sold bad debt portfolios for 3,516 million (-48.6%).
Of the operations carried out in these years, the Quasar Project, carried out by Blackstone and Santander in 2017 and with a volume of 30,000 million euros. The bank chaired by Ana Botín exhibited at the end of 2021 a delinquency ratio of 3.16% globally, with a coverage rate –money set aside to cover defaults on doubtful loans– of 71%. According to Axis data, it still has a stock of 12.5 billion to be released.
The second largest operation by volume is the so-called Marine Project, a portfolio of 13,086 million that BBVA sold to Cerberus in 2017 for 4,000 million. The entity chaired by Carlos Torres, which closed the 2021 financial year with a delinquency ratio of 4.1% and coverage of 75%, still has 7,200 million to dispose of.
The third largest transaction in the last six years was carried out by CaixaBank in 2018 when he transferred to Lone Star the so-called Gama Project, a portfolio of failed assets for a nominal value of 10,000 million. The entity chaired by José Ignacio Goirigolzarri registered a non-performing loan ratio of 3.6% at the end of 2021, with a coverage rate of 63%. According to Axis data, the Catalan entity still maintains a stock of 14,800 million in toxic assets (of which 6,200 are inherited from Bankia).