Well, 2011 starts at least with an exercise of honesty and transparency in the Spanish property market – we hope so. After January with banks and saving banks (Cajas de Ahorros) having disclosed their property balance and exposure to risks, the final figure of distressed assets and exposure to risk in financial entities stock is €217,000 million, updated to January 2011.
The final figures, one by one
Banco Financiero y de Ahorros is the financial entity with a higher volume of property repossessions (€ 11,048), followed by Banco de Santander (€ 7,509 mill), Catalunya Caixa (€5,435 mill), BBVA (€ 4,793 m ) , La Caixa ( € 4,651 m), Banco base (€ 4,208 m), Banco Popular( €3,689 m), Novacaixagalicia (€ 3,525 m), Mare Nostrum (€ 2,949 m), Banco Sabadell (€ 2,880m ) Unnim (€1,985 m), Caja España Duero (€1,083m ), Unicaja (€ 985m) as the most relevant.
The reform needs to clear the balance of the savings banks. According to analysts at Evolution Securities (20th Jan report), savings banks need €50bill to back their assets and operations. It is time to raise money and to negotiate with foreign property investors. We heard that Barclays is interested in the Spanish savings banks stake: Welcome!
A foreign bank may come with a large property investment group.
CONCLUSIONS
- Week after week the property business becomes a bigger burden for a banking system that needs to move on. The figure is always bigger and the economic climate seems worse: unemployment, rising interest rates, less lending …
- 46% of the property business in which Banks are involved is high risk according to the Bank of Spain. From our modest understanding (I mean TheSpanishBrick.com), high risk only will be eased by releasing burden: selling assets even if losses are higher than expected.
Read the full article about Spanish banks repossessions and property bargains