Banco Popular sells Project Icaria for €495M

Banco Popular sells Project Icaria for €495M

According to Spanish Real Estate, this portfolio is essentially made up of suspect loans, related to property assets, corresponding to not many loans but large ones, guaranteed by hotel and residential development assets. On the other hand, 10% of the portfolio is made up of tendered property. 

The consultancy Irea is responsible for this process , and has organised a very restricted process with just one group of international investors. Four candidates are eligible:  Apollo, Oaktree, Bank of America Merrill Lynch and Bain Capital. The same source explains that the selection of only four candidates reflects the bank’s intention for a speedy process. The aim is to complete the sale in June. 

If the case does close in June,  Banco Popular would be able to register the reduction of damaged assets  in their first quarterly accounts and add new improvements to their capital ratio, which is in a tight situation close to the minimum requirements demanded by the BCE. 

The sale of large asset portfolios to international investors is key to the strategy of the new president,  Emilio Saracho, intending to reflect the bank's strategy. Popular wants to concentrate mainly on disinvestments to quicken up the disinvestment rate of its unproductive assets, which may compromise the independent viability. Additionally, Popular still has a portfolio of unproductive assets totalling 37,000 million euros. 

The managing Director of Popular,  Ignacio Sánchez-Asiaín, said at the presentation of the results of the first quarter that the objective was to end the year with sales of  2,000 million euros, extrapolating the reduction of some 500 million euros obtained between January and March as one whole, as quoted in the  ‘Expansión’. However, he indicated that this figure could rise if the firm completed an “anchor sale”, such as the sale of the Icaria portfolio.


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