スペイン国立銀行の2009ー2010年の検査報告によると、BANKIA銀行の前身のCAJA MADRIDは、支払い能力の無い顧客に融資したり、経営危険を無視した専門家とはいえない無茶苦茶な融資を連発していた不良経営をしていた
INFORMES DE LA INSPECCIÓN DEL BANCO DE ESPAÑA (2009-2010)
Caja Madrid concedía préstamos a clientes sin capacidad de pago
“Tardó mucho tiempo en reaccionar ante el problema detectado en 2006”
La entidad tenía una morosidad elevada con tendencia al alza ya en 2010
Francisco Mercado Madrid 23 SEP 2012 - 00:00 CET
INSPECTION REPORTS BANK OF SPAIN (2009-2010)
Caja Madrid provided loans to customers unable to pay
"It took a long time to react to the problem identified in 2006"
The entity had a higher delinquency and an upward trend in 2010
Francisco Mercado Madrid 23 SEP 2012 - 00:00 CET
The judicial inquiry opened in the High Court against the executives for alleged fraud Bankia starts showing how years before the creation of this bank after the merger of various boxes, years before the IPO and years before they were changed Risk provisioning rules, its main asset, Caja Madrid, and had water. In 2009 and 2010, the Bank of Spain conducted inspections on said housing paths and found serious irregularities and significant risk management, which considered unprofessional.
The Bank of Spain found irregularities between 2009 and 2010 revisions
Inspection reports, incorporated into the preliminary proceedings in the High Court, stress that the foundations of the great financial problem detected were created between 2003 and 2007. During those years, Caja Madrid got into a spiraling lending to real estate and home ownership without proper risk assessment. "It is clear that failure has resulted from having swung the expansion of the box in a credit policy based loans in excess of 80% of the security (...) where the filters were not working, were granted loans for whom, in fact, had no ability to pay ", the inspectors reported.
Purchase prices "inflated compared to their real value"
Mortgaged without regular income. The 2009 report of the inspectors of the Bank of Spain, after sampling and refinanced loans granted by Caja Madrid, abundance anomalies observed. For example: "Many of these loans are granted in their home operations to clients without regular income, coupled with very high purchase prices (inflated compared to its actual value), and linked to the situation of interest rates in late 2008 and early 2009, have become unbearable burden for the borrower. "
Unable to determine the ability to pay. In 22% of cases "has been impossible to determine the ability to pay, because it did not provide proof of income or unknown the amount of fees to which they must deal for debt in other entities." "In 40% of cases, due to the deterioration of the economic situation of the client and the high effort of the resulting fee payment in relation to your income, consider very questionable ability to repay the loan." In 50% of the sample, "the Installment consumes more than 60% of the combined income of the owners, mostly low-wage and therefore with little surplus to live, even to consume 100% of their revenues by 17% [of the sample]. "
Revenue in excess of actual client. "In some cases we have seen that the manager when entering customer data in the proposed alignment, recognizes revenues in excess of that are extracted from documents, assuming good extra income without justifying the client states." Caja Madrid claimed that "when the client declares extra income, are considered proven by the fact that it really has been paying a fee so far beyond his official income." "In 45% of cases do not include the appraisal certificate, although manual established mandatory inclusion in it." In 100% of cases there was no information on payment obligations to other entities, if any, "it undermines the effort to determine the client's ability to pay."
The Bank of Spain reviews in its 2010 report that the boxes were merged to create Bankia had applied in 2010 to 4.465 million FROB. Caja Madrid and then performing assets accumulated by 7.282 million and 6.254 million for substandard risks. Caja Madrid's profile describing inspectors is disturbing: "Entity with decreasing adjusted solvency and profitability. Delinquency elevated upward trend, which is above the group, due mainly to the retail mortgage portfolio and risk significant promoter. The deterioration of the credit portfolio is the result of the excesses committed between 2003 and 2006 (strategic plan), which represented an average increase of 22% investment, focusing on property risk, which is where the main problems. The promoters funding amounts to some 18,000 million, with a failure rate of 20%, of which 5,200 million are land financing and more than 7,000 are promotions ".
Inspectors came to question the political profile of the managers of the box. "It recommended a CEO of the banking sector to the extent that the current structure of DDGs around a CEO with a nonbank profile has not been successful."
The inspectors questioned the political profile of the case managers
In the last inspection in the record book, conducted between March 31, 2009 and September 30, 2010, thus affecting the presidencies of Miguel Blesa and Rodrigo Rato, the horizon is again described black. "From individualized investment review identified the need for a risk reclassifications doubtful assets 1,297,000 and substandard category by 1.425 million, which accounted for additional consolidation needs to cover these risks by 577 million, leaving a backlog of accounting 223 000 000 to doubtful, substandard 225 million and the creation of 110 million credit loss, "he says.
The report, which would become the diagnosis of a terminal illness, other serious symptoms revealed: "A review of the remaining structural credit portfolio expected losses were identified in a two-year time scenario amounting to 4.983 million, of which 3020 million would match most problematic borrowers whose future recognition would be a high level of uncertainty about the ability of absorbing them through the box scores. Finally, the review of goodwill on equity investments and the valuation of an investee portfolio classified as available for sale will require additional provisions in the income statement amounted to 548 million. " These figures were black in late 2010. But how he got here? Officials at the Bank of Spain in both crudely shelled inspections.
■ Funding to developers. Caja Madrid's policy in this chapter "pursued in most cases a temporary solution of problems of viability of many advocacy groups, by granting deficiencies main refinancing activation and unpaid interest and in some cases were granted lack of interest. No policy of refinancing documented and approved at the appropriate level. "
■ Aggressive trade policy without assessing risks. The inspectors noted that "the portfolio default rate at 30 June 2010 is 4.7% after peaking at 7.6% in June 2009, well above the industry average ratios of banks and savings banks (2.7% and 2.3%). This difference in the delinquency ratio brings because of the aggressive commercial policy of the box during the years 2004-2006, weaknesses in the evaluation of the ability to pay and admission policies implicitly forced operations result scoring tool [ risk assessment of the applicant]. "
■ Portfolio refinanced. The portfolio refinanced, 5.174 million in June 2010, had "a high-risk profile by focusing on the most problematic years (2005-2007), with a high percentage of defaults." And at this point it looked that bad loans had been granted because there was no proper documentation of current income, not updating its risks, and appraisals.
■ Valuations unreal and irregular. Much of the risk in the lending arose from irregularities and weaknesses in procedures Caja Madrid when a security check and appraisals. "There are no procedures for the review of the value of collateral, the collateral base does not have sufficient information to make an update of their value, but has a base that would allow complete appraisals properly used in the valuation Allotment Tasamadrid appraisals, company that does not meet the independence requirement to belong to the group of the box, and deficiencies in the quality of appraisals (primarily land), and errors in the reflection of your data in the file guarantees " . But these serious cracks on the reliability and stability of Caja Madrid not issued for the first time the Bank of Spain after inspection between September 2009 and September 2010. A year earlier the same conclusions reached through inspection rotated between March and September 2009, therefore, a year before the merger to create Bankia: "Caja Madrid has a very high default rates, especially motivated by the mortgage portfolio retailer and developer risk portfolio (the latter influenced by Martinsa) ".
■ very late response. "Until 2007 the scoring model (automatic evaluation system applications for loans) did not include risk factors differentiating the channel or input or the nationality of the borrower and that internal audit reports reiterated in these years a deficiency in information about the borrower's ability to pay, has resulted in a high-risk mortgage loans, in cycles like the current recession, account for most delinquent compared to the rest of the system entities. Regarding the problem of data quality is our view that it took too long to react to the problem identified by 2006 ".
■ Credits forced. The report noted that while operations are considered forced [formally be rejected] 11.6% of the portfolio, the balance amounted to breach 29%. "The inspection team found inconsistencies between criteria and justifications given by the entity on forced operations and increasingly negative evolution of these." "He seems to have taken appropriate policies regarding scoring, but too late." "There remains the question of the level of adoption of these policies and documents scoring where they are reflected, as well as the information that is passed to the Council or upper body, as it has not received any policy document and the Council minutes have not read anything about this issue. "■ Valuations inadequate. Poor pricing of goods involved in the operations of Caja Madrid has several negative consequences. When a realignment of operations to seek assurance on the client, it collides with the fact that valuations remain original, "made booming real estate and therefore overvalued". In this chapter it was noted that the valuations of assets received in lieu of payment were much higher than the appraised value set before selling. They used to go down to 30%. "This situation gives rise to overestimate the asset at the time of registration and will underestimate the loss."
■ Risk promoter. "On December 31, 2008 the promotion risk [credits to developers] provisions amounted to 22,915,000, representing 18.4% of total credit risk. The NPL ratio stood at 10.92% compared to 5.50% of the company overall and 3.80% of the comparison group, if you include the risks classified as substandard, the default rate will be adjusted to obtain the 14% ".■ Acquisition of assets. "We have identified weaknesses of medium importance in the monitoring of the development risk, the most notable being the poor refinanced control operations." On the other hand, "Caja Madrid has no policies with respect to asset acquisitions promoters, performing ad hoc actions. These acquisitions, "the document adds," are reaching very significant figures, completely overflowing expected to pose a flight forward policy to provide provisional feasibility to borrowers affected. "
The merger will prevent "the risk of loss"
In March 2010, Caja Madrid formally presented the report of the Bank of Spain closed in July 2009. Since then, the inspectors held a continuing audit on the case until September 2010. Therefore, the final written data included a decisive event occurred during the last inspection. The June 14, 2010, Caja Madrid began the process of merging with several boxes to create Bankia. On June 29, while its inspectors continued their task of auditing and Caja Madrid continued despite the evils that followed saw uncorrected, the Bank of Spain gave the green light to the merger.
The Bank of Spain devoted hundreds of pages to reel the grave evils afflicting Caja Madrid, but he made up all in one sentence committed to the success of the merger: "Given the limited resources generation due in 2010 and 2011 to meet the needs insolvencies sanitation and other losses, it was considered necessary to involve Caja Madrid in an integration process in order to avoid the risk of going into losses in some of these exercises. " The merger allowed for heavy writedowns against equity rather than in the income statement.
And all this despite his doubts about the accounting for loans, and collateral checks and appraisals. Some appraisals that breaching a rule issued in 2004: to be independent of the bank. And in this case was a signature box, Tasamadrid.
The excesses in the credit allocation had been warned in the last inspection prior to 2009 and 2010, cursada in 2006. And despite such warning on mortgages that were granted for 85% of assessed valuation, five points above the lending standards, appraisals overstated and unreliable, poor control of income and assessing customer guarantees, massive forced operations (to comply with the standards in order to be granted), the detected tumor was growing year after year to be incurable. Only the real estate sector, alongside the retail sector credit cheerful, gave rise to the weakness of Caja Madrid.
Two years after the last inspection report of the Bank of Spain supported the merger of boxes "avoid entering riesto losses", Bankia sought 23,465,000 of public money to stabilize and recapitalize pierced by an entity acquired in risks stage of the real estate boom.
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