Santander to offload Banco Popular NPLs

Spain’s Banco Santander is planning to sell the property exposure of the recently-purchased Banco Popular at a discount of up to 40 percent, according to Spanish news agency Europa Press.

Spain’s Banco Santander is planning to sell the property exposure of the recently purchased Banco Popular at a discount of up to 40 percent, according to Spanish news agency Europa Press.

The real estate-owned assets and non-performing real estate loans held by Banco Popular could be sold at a discount in the region of 30 percent to 40 percent as Santander opts for a quick sale, said Europa Press, citing market sources.

Recent reports emerged that Santander is mulling a property-asset sale of €15 million, in a sign that the company is racing ahead with its plan to clean up Popular’s balance sheet, according to Bloomberg.

Following the recent acquisition of Banco Popular, for a notional consideration of €1, Santander acquired property assets and non-performing loans linked to real estate amounting to €29.8 billion.

Santander said at the time that it would make additional provisions for non-performing assets of €7.9 billion, including €7.2 billion for real estate, to bring Popular’s provisions and capital in line with the rest of the group. This is expected to increase coverage for real estate assets and real estate non-performing loans from 45 percent to 69 percent, significantly above peer average (52 percent), the Spanish lender said.

Santander also said it expects to reduce Popular’s real estate exposure “significantly”.

According to a presentation on the bank’s website, the plan is to reduce Banco Popular real estate assets and property-backed NPLs to “non-material levels within three years”.

Santander highlighted that it has a “strong track record” in managing non-performing assets, having reduced its exposure to real estate assets by 60 percent from 2012 to Q1 2017.

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