Solvia, one of the main platforms of management of real estate assets in Spain, ensures that domestic banking will once again lead this year and for the third consecutive year the transactions of delinquent loan portfolios and foreclosed assets (NPLs and REOs, in its acronym in English) , as it did during the past year.
The novelty, however, is that after two consecutive years, 2017 and 2018, in which the operation was the sale of macro-portfolios of foreclosed assets and delinquent loans by banks to investment funds, currently the trend that It has begun to "become relevant are the operations called mid-market, with volumes of less than 1,000 million euros, which necessarily will have to rely on the management of large professionalized servicing platforms," he explains. José La Roche, director of business development and consulting for Solvia A report distributed yesterday to his clients.
One of the last operations of a large sale of portfolios in 2018 was the one starring Sabadell Bank, which was released at one time from all its portfolios of foreclosed assets for 9,100 million euros, and a debt portfolio of 2,400 million. After these sales, Sabadell "is one of the banks with the lowest exposure cretidicia", explains Solvia.
La Roche stresses that among the new "trends, the secondary debt market takes center stage, where operations will be closed between mutual funds, and there is a growing interest in performing assets, which will offer greater security."
Spain has been leading the market for the sale of foreclosed assets and delinquent loans for two years, after closing operations for more than 90,000 million euros between 2017 and 2018. "In this way, the volume of NPLs in Spain has been reduced to a close balance to 100,000 million euros, "says the report.
From 2014 to 2018, the NPL ratio (over the total credit granted) in European banks has been reduced, according to data from the European Banking Authority (EBA) from 6.5% to 3.4% (equivalent to 714,300 million at the end of 2018) at the end of last year, after transferring 470,000 million euros from financial institutions to investment funds.
Spain and Italy have been the main focus of attraction for international investment, concentrating 67% of operations in the last two years.
In 2018, Spanish banks lost more than 40,000 million euros in foreclosed assets and delinquent loans, while the Italian bank did so at 36,600 million and the Irish at 15,300 million, the British at 7,900 million, the Portuguese at 5,200 million and the Greek in 3,200 million.
Solvia explains that REOs continue to be a very attractive product for investors, who can achieve high returns supported by the management of servicing platforms.