The Spanish financial sector has a real estate problem "unrecognized" of 50,000 million euros, which must be added to the 180,000 reported to the Bank of Spain, according to a report by Boston Colsulting Group (BCG). In this situation, the consultant estimated that the actual capital requirements are between 20,000 and 35,000 million, and that could be made ??up to FROB 20% of the sector.
Among the toxic assets include land and homes foreclosed, developer and builder credit delinquent or substandard, and delinquent mortgages. This increase will require additional provisions providing for 30,000 million , as all banks and only 50,000 million has accrued to date (27% of the troubled assets recognized). With these estimated 80,000 million, would cover 35% of the total toxic assets, which would be the expected loss due to BCG.
The study, conducted for the AEB, a scenario 'healthy' for the sector in 2015 in which all institutions are sound and privatized by then, and have returned to levels of efficiency and profitability similar to those before the crisis. In this scenario, provides a credit line with the new rules, which require between 20,000 and 35,000 million of additional capital , based on the performance of the economy.
The reason is that "we think the provisions already made ??by entities in late 2010 will not be enough to cover all future losses on the assets, "the report said. He adds that "the development of business not in all cases will generate positive results enough to offset these declines."
And what is more striking still, BCG estimates that not all entities generally achieve sufficient capital to repay the FROB 1 , ie, public injections given in the form of loan, share, last year. And that the percentage increase in state hands in 2015, the deadline to repay the aid.
What's more, it also provides that "new institutions, including banks , may enter into equity gap "in the coming years as it expects two to three years over credit crunch and margins under pressure, than the effort on provisions already mentioned.
At that juncture, the big question is whether banks will be able to capture private money or not, which depends on the price transparency, the "equity story" and possible guarantees to provide the state (active protection scheme or ' bad bank ').
Otherwise, the FROB can be up to 20% of capital in the sector in 2015. The final amount will depend on whether the entities that have announced they will go public or attract private capital (especially Bankia) are successful.
Among the toxic assets include land and homes foreclosed, developer and builder credit delinquent or substandard, and delinquent mortgages. This increase will require additional provisions providing for 30,000 million , as all banks and only 50,000 million has accrued to date (27% of the troubled assets recognized). With these estimated 80,000 million, would cover 35% of the total toxic assets, which would be the expected loss due to BCG.
The study, conducted for the AEB, a scenario 'healthy' for the sector in 2015 in which all institutions are sound and privatized by then, and have returned to levels of efficiency and profitability similar to those before the crisis. In this scenario, provides a credit line with the new rules, which require between 20,000 and 35,000 million of additional capital , based on the performance of the economy.
The reason is that "we think the provisions already made ??by entities in late 2010 will not be enough to cover all future losses on the assets, "the report said. He adds that "the development of business not in all cases will generate positive results enough to offset these declines."
And what is more striking still, BCG estimates that not all entities generally achieve sufficient capital to repay the FROB 1 , ie, public injections given in the form of loan, share, last year. And that the percentage increase in state hands in 2015, the deadline to repay the aid.
What's more, it also provides that "new institutions, including banks , may enter into equity gap "in the coming years as it expects two to three years over credit crunch and margins under pressure, than the effort on provisions already mentioned.
At that juncture, the big question is whether banks will be able to capture private money or not, which depends on the price transparency, the "equity story" and possible guarantees to provide the state (active protection scheme or ' bad bank ').
Otherwise, the FROB can be up to 20% of capital in the sector in 2015. The final amount will depend on whether the entities that have announced they will go public or attract private capital (especially Bankia) are successful.
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