Santander and Caixabank This year they lead the wave of failed portfolio sales, supported by largely due to mortgages or real estate.
Both entities are preparing portfolios that will be around 5 billion euros, according to financial sources close to the projects of the two banks.
The banking operations should be lower this year than last year, mainly due to the difficulties financing purchases.
Of these wallets, Santander intends to market portfolios worth approximately 3,000 millions of euros, including doubtful credit (NPLs or nonperforming credit, in the English of the sector) with mortgage guarantee and without guarantee (or without guarantee). with real estate.
For its part, Caixabank will launch portfolios of less than 2,000 million, according to financial sources. This is precisely the amount that you are Sources indicate that last year he sold the entity headed by Gonzalo Gortázar as general director.
A rate cut is also expected for BBVA, Sabadell, Bankinter and Unicaja Banco.
In general, according to preliminary data from the financial sector, the banking sector is moving away from non-performing loans of more than 10 billion administered last year.
This is due to changes in economic conditions. The rise in interest rates also affects this market transfer of failed portfolios, according to confirm two financial sources, since buyers (usually real estate funds) It is more difficult for them to finance operations since obtaining funds has become more expensive since the European Central Bank (ECB) decided last year to raise rates to control inflation.
In fact, the experts interviewed pointed out that some transactions were rejected in recent months.
Lower price
Furthermore, the increase in rates has another consequence: wallets get cheaper. Therefore, it is expected that the financial institutions block these types of transactions.
The explanation is motivated by the fact that the losses associated with these loans do not increase much.
This type of loan is sold at a price lower than that usually offered by banks, so you have to take into account losses.
In general, each entity estimates how much prevarication is available in these 12 months with portfolio negotiations.
If, as expected this year, the fall in the exchange rate further exacerbates the loss on portfolio sale, all banks They will close when they have exhausted the estimated red numbers.
Minor receipts
This circumstance meant that, from the last months of last year and beginning of 2023, the sale of files bankruptcy proceedings were very limited.
The market expects Santander and Caixabank and others sell these wallets fromthe second quarter, but especially during the summer.
The sector also hopes that the portfolios enter the market are minors, in the case of housing loans, it is expected promissory notes of the order of 500 million, and in the case of unsecured credits, up to 1,000 million.
This type of portfolio includes property-related loans. These loans assume approximately 30% (and in some cases up to 50%) of the net book value.
That is, if the bank sells a portfolio of 100 million, you will only enter with 30 million.
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In the case of unsecured loans, their value is much lower: around 5%, because it is difficult to recover the amounts (without guarantee of the property).
So, in one portfolio of 100 million, can collect about five million.
This type of non-compliance includes credit standards, consumer credit and mortgage queues (debts that remain unpaid with the client after the bank has awarded him the property).
Far from selling large portfolios
- Money. Gone are the days of selling large letters glued to tiles. Large corporations have already zeroed out their balances with large assets as buyers. This was the case of the business of Santander real estate exhibition (inherited of Popular), which was sold to Blackstone. BBVA from Cerberus, Caixabank, Fortress and Oaktree from Lone Star were other active players. After this cleanup, the transmission speed has decreased since 2020.
- Delinquency. It remains to be seen how the recession and rising interest rates will affect bank defaults. and cause the accumulation of non-performing loans. At the end of the year, the Bank of Spain indicated in its Report Autumn Financial Stability that the environment of high inflation and rising interest rates had weakened the solvency of families and companies. Likewise, the Authority European Banking Authority (EBA) warned on the same dates about an increase in bank defaults and noted that the deterioration in asset quality could be particularly strong in the event of strong corrections in real estate markets.