Report by PRIME YIELD, a GLOVAL subsidiary, on the view of Non-Performing Loans (NPLs) and Real Estate Owned (REO) in Spain.

Information on the current situation of the real-estate market and its macro-economic context. We’d like to highlight that the Spanish GDP growth for the third quarter of 2018 showed a 2.4% increase according the Spanish Statistics Institute (INE). Within the context of the real-estate market, the rise in house prices according to the INE for the third quarter of 2018 was 7.2%. The number of houses sold between January and November 2018, according to the INE, was 481,220 houses and the gross yield on housing rentals for the second quarter of 2018 was 4.1% according to the Bank of Spain.

The NPL stock in June 2019, according to the Bank of Spain was €74.8M, having dropped from its 2013 peak of €114M. The NPL ratio for the second quarter of 2018, according to EBA, was 4.2% and the potential transaction amount in 2018 was €90M.

The Spanish banks have reduced their non-performing loans ratio but continue to have one of the largest stocks of this type of assets in Europe, with 74,800 million euros, which remain as one of the main investment destinations in Europe, mainly for North American private groups.