Cajas Begin to Announce Outstanding Debt
January 26th, 2011
CatalunyaCaixa, one of the weakest of Spain’s savings banks, has revealed that it holds 12.8 billion euros in outstanding loans with real estate developers, as well as foreclosed properties worth 3.73 billion.
CatalunyaCaixa announcements is part of a complete disclosure by the “Cajas,” who have been required by the Bank of Spain to disclose more details about their credit book, and particularly about their exposure to the Spanish real estate market in an effort to dispel any fears about the health of the country’s banking sector.
CatalunyaCaixa, based in Barcelona, is Spain’s fourth savings bank in terms of consolidated assets, with €81.020 billion. It is considered to be among the lenders that was most aggressive with lending to the real estate sector.
It said its €12.8 billion in loans to home builders account for 17% of its total assets and 27% of these loans were either in default or at risk of defaulting at the end of the year.
CatalunyaCaixa, which is the result of the merger of Caixa Catalunya, Caixa Tarragona and Caixa Manresa. The bank has 1212 branches and over 4 million customers and has received €1.25 billion in loans from the state’s bank bailout fund (FROD) last year to help it restructure and boost solvency. Even so, its core Tier 1 capital ratio remains below the new 8% minimum imposed by the government earlier this week, standing at 7.5% at the end of 2010. From Dow Jones
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