How Spanish banks arrived on your High Street

Have you ever wondered how Spanish banks seem to be cropping up everywhere, yet reports from Spain inform us that the housing crash there has been worse than anything Britain has so far seen, also that Spain is high on the list of those next in line for an EU bail out and, worse still, that unemployment in that desperate country is above 20 per cent? If not, then perhaps you should, especially if you are placing your earnings or savings in their care.

Consider this report from Bloomberg, of yesterday, which describes how mobile phone activated, flash mobs are temporarily preventing repossessions of people’s homes in that country, the link is here, I quote what appears to me the most interesting facts:

On July 1, the cabinet passed legislation forcing lenders that seized homes to auction them for as little as 60 percent of the estimated value. Previously, the minimum bid was fixed at 70 percent of the value, discouraging buyers in a market where house prices have fallen 26 percent from the 2007 peak, according to a July 5 report by, a real-estate website, and the IESE Business School.

No Bidders

If there are no bidders, banks can now award themselves the property for 60 percent of the appraisal value, leaving the mortgage holder liable for the remaining 40 percent minus any loan repayments that have been made. Before the law was changed, lenders could get the property for half of its estimated value, increasing the amount payable by the former owner.

“Responding to populist pressure is all very well, but you have to take care not to ruin a mortgage market that is seen as a model internationally,” Angel Cano, president and chief operating officer of Banco Bilbao Vizcaya Argentaria SA (BBVA), told reporters in Barcelona last month. BBVA is Spain’s second- largest bank.

Enforced Write-offs

The measures don’t go far enough for PAH, whose name means “platform for those affected by their mortgage,” and opposition parties including the Galician Nationalist Bloc. They want the government to force banks to write off the debt of homeowners who default due to illness or loss of employment, or if the property is their only residence.

“We’re still seeing cases of people who lose their homes and still owe the bank as much as 200,000 euros,” Morte said.

Now Lloyds Bank, who were forced to take-over HBOS due to the sordid and lying manipulations of Gordon Brown, and a huge confidence trick by the markets against the Lloyds shareholders, (for more background see here),ended up with a huge portfolio of British mortgage debt resulting from the crazed lending policies allowed during the New Labour, imaginary, UK property boom.

In Spain, even when they have driven the economically suffering homeowner from his house, the bank is still owed the money by the most-probably unemployed victim. Living as he likely is, in a cardboard box down a side alley of some Spanish town, this hardly forms a good capital base for the banks concerned. Yet with their robust books, these banks have been permitted to takeover the high street properties of our own banks, victims themselves of more realistic house financing arrangements and of our so far, less severe, housing crisis.

Think on it, and ponder why the Cajas, now coming to market, (supposedly next week, but already much deferred,) are having to price their first public offerings of shares so far below their supposed book values.

Neither believe the book values of Spain’s banks, nor the stress test of any EU banks, as released last evening at 5 p.m., (when the markets had closed!) If it is information released by anything connected with the EU, it will never do any harm to treat it with nothing but the utmost suspicion – the EU institutions are broken and broke, and there appears to be nothing the EU leaders will not stoop to do to avoid confronting that fact. We taxpayers will inevitably end up paying the bill, why let them also take your savings on the way, they are already depriving you of any interest at present inflation rates!


3 comments for “How Spanish banks arrived on your High Street

  1. ivan
    July 16, 2011 at 9:18 am

    the EU institutions are broken and broke and haven’t been able to get their accounts past the auditor since the beginning. Not the sort of people you can trust with anything.

  2. July 16, 2011 at 10:33 am

    Yes, it is very suspicious how Santander has been able to swoop in and buy up British banks.

    It is also suspicious how Lloyds gained a Portuguese MD just as Portugal might have to be bailed out. When it comes to the crunch, will Horta Osorio put Portuguese interests before Britain?

    He also defected from Santander just as it was being investigated in Spain, and brought three – or is it four? – of his management team with him.

    And his replacement at Santander is the daughter of another director, IIRC.

    Nepotism, favouritism, corruption. Welcome to banking, Spanish style.

Comments are closed.