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Spain’s Liberbank sells property division to speed sale of distressed assets

Liberbank, the eighth-largest bank in Spain by market value, has sold its property asset manager to Spanish servicer Haya Real Estate, which is owned by Cerberus.

Liberbank, the eighth-largest bank in Spain by market value, has sold its property asset manager to Spanish servicer Haya Real Estate, which is owned by Cerberus.

As part of Mihabitans sale, Haya Real Estate, which currently manages property assets valued at €39 billion, will be the sole manager of Liberbank’s current and future real estate-owned exposure for the next seven years.

Liberbank said it aims to achieve a “significant reduction” in its non-performing assets through the sale, as it focuses on its traditional financial business. Haya Real Estate is expected to accelerate the divestment pace of the bank’s real estate assets.

On 12 June, Spain’s stock market regulator imposed a one month short-selling ban on Liberbank to prevent a domino effect following the failure of Banco Popular, which was sold to Santander for €1 after the bank’s stock price plunged.

Liberbank is trying to reduce its default ratio to below 9 percent in 2017, from the 11.3 percent recorded at the end of June this year. For next year, the bank aims to reach a 5 percent default ratio and 3.5 percent in 2019.

The bank has established gross debt divestment objectives for its foreclosed assets, which are estimated at €410 million in 2017, €625 million in 2018 and €850 million in 2019.

The volume of non-performing loans held by Liberbank declined by 20.2 percent to €649 million from January to June this year. The bank reduced its NPLs by 38.7 percent during the same period a year ago.

The bank said it had recently sold a portfolio of NPLs amounting to €169 million.

In 2016, Liberbank sold real estate assets worth €185 million, an increase of 262 percent on the previous year. During the first half of 2017, sales amounted to €132 million, implying a year-on-year growth of almost 50 percent.

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