RBS looking to sell Spanish commercial property portfolio

| October 18, 2010 | 1 Comment

The Royal Bank of Scotland (RBS), which is 83% owned by the taxpayer, is understood to be looking at selling a £1 billion Spanish property loan portfolio, as it looks to offload unwanted assets.

The speculation comes as the bank has been selling assets under the orders of the European Commission, as a punishment of the billions of pounds in state aid that RBS received by the Government at the height of the financial crisis.

The bank has appointed investment bank, Morgan Stanley, to establish whether private equity groups and other investors would have be interested in buying the portfolio.

The Spanish portfolio is primarily made up of debt secured on commercial real estate in the troubled Spanish property market. RBS was a major lender to Spanish developers in the build-up to the financial crisis.

The Spanish market was one of the hardest hit in the property slump and has yet to see a clear recovery in its housing market.

The slump led to thousands of job losses within the construction industry, resulting in Spain having one of the highest unemployment rates in Europe.

In the meantime, last month RBS said it was axing 500 administrative jobs at its investment banking division.

The bank has axed around 26,000 jobs since the onset of the financial crisis.

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  1. Resale Centre says:

    In business terms who the hell would want to buy up all this bad debt on commercial property in Spain?

    And 1bn? All I can say is good luck to RBS, they will never get anywhere near the money they value it at - and to top it off - they will dilute the property market with over priced rubbish that yet again no one will want to buy. Nice.

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