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Live Webcast Of Formal Spanish Bank Bailout Capital Needs Announcement

Tyler Durden's picture





 

For our Spanish-speaking viewers, here is the webcast during which the final results of the Oliver Wyman et al consultancy report identifying insolvent Spanish bank capital needs will be presented. This conference is not to be confused with the July 2011 stress test which saw all Spanish banks passing with flying colors. We know very well that the cap at this conference is €100 billion even if the final need will be far higher. The only question is how much of its credibility will Oliver Wyman sacrifice to create a short term bounce in Spanish bonds by undercutting the real number, even as the real bailout needs creep ever higher.

Some highlights:

  • SPAIN STRESS TEST ADVERSE SCENARIO SEES 6.5% GDP DECLINE
  • SPAIN STRESS TEST ADVERSE SCENARIO SEES 26.4% HOUSE PRICE FALL
  • ADVERSE SCENARIO SEES 55%-60% PEAK TO TROUGH HOUSE PRICE FALL

And the actual numbers:

  • SPAIN BANKS NEED EU16-25 BLN OF CAPITAL IN CENTRAL SCENARIO
  • OLIVER WYMAN ADVERSE SCENARIO SHOWS CAPITAL NEED OF EU51-62 BLN
  • ROLAND BERGER ADVERSE SCENARIO EU51.8 BLN CAPITAL NEEDS
  • RESTOY SAYS PROBLEMS LIMITED TO BANKS THAT ALREADY BEEN SEIZED

Got it: Undercutting reality once again because nobody ever learns that by demanding more, more, more bailouts in a week or a month only destroys the impact and kills what little credibility there is.

When is the Second Spanish bank bailout.

And the punchline:

  • RESTOY SAYS CORE OF BANKING SYSTEM IS RESILIENT.

Well, under these conditions there is no reason why anyone should lessen the subordination requirements of the ESM. Assuming it is even implemented.

 


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Thu, 06/21/2012 - 11:43 | Link to Comment SilverTree
SilverTree's picture

No habla

Thu, 06/21/2012 - 11:47 | Link to Comment ZerOhead
ZerOhead's picture

He said... and I quote...

"The Pain in Spain

Will fall mainly on the Germans"

Thu, 06/21/2012 - 11:50 | Link to Comment Skip 2 My Lou
Skip 2 My Lou's picture

LA GARANTIA SOY YO!!!!

Thu, 06/21/2012 - 11:53 | Link to Comment jcia
jcia's picture

me lo puedo imaginar..."Necesitamos confianza y tenemos que ayudar al mercado..."

que clase de chupa pinga

Thu, 06/21/2012 - 11:44 | Link to Comment Linus2011
Linus2011's picture

quadruple it - and you still are nowhere near it!

Thu, 06/21/2012 - 11:45 | Link to Comment mrktwtch2
mrktwtch2's picture

yo tango free euros por favor (i want free euro please..)

Thu, 06/21/2012 - 11:45 | Link to Comment Linus2011
Linus2011's picture
Gauck verschiebt Unterschrift unter Gesetz für Rettungsschirm

 

looks like the german taxpayer money pumping machine is "stottering"

Thu, 06/21/2012 - 11:49 | Link to Comment Cast Iron Skillet
Cast Iron Skillet's picture

best news I've heard for a long time.

Thu, 06/21/2012 - 12:15 | Link to Comment magpie
magpie's picture

Dunno, there still might be questionable home loans or phone conversations to uncover like with the last guy.

Thu, 06/21/2012 - 12:18 | Link to Comment OttoMBMP
OttoMBMP's picture

German Constitutional Court is corrupt.

Not much hope there.

Thu, 06/21/2012 - 12:32 | Link to Comment Linus2011
Linus2011's picture

sure it is. however things do not look that smooth over here. even the moronic judges and politicians do not feel comfortable anymore.

 

Thu, 06/21/2012 - 11:46 | Link to Comment CommunityStandard
CommunityStandard's picture

Donde esta mi toalla de Spiderman?

Thu, 06/21/2012 - 11:47 | Link to Comment caimen garou
caimen garou's picture

would you like that in large or small bills?

Thu, 06/21/2012 - 11:52 | Link to Comment Linus2011
Linus2011's picture

as for spain:

we spent vacation in a mallorcan finca 4 years ago. basically a very small 2 bedroom hut. this was bought by a german 15 years ago for 50000 DM. The house was rated at 600000 EUR = 1 200 000 DM - 4 years ago. He now wants to get out and sell it for 370 000 EUR=720 000DM.

You can see all the insanity in this story.

in my opinion it will eventually be sold for 30000 new DM!

Thu, 06/21/2012 - 12:32 | Link to Comment Wizard of Finance
Wizard of Finance's picture

wait a minute!! 

so, the actual insane crazy guy fuelling the spanish real estate bubble was one of these hard working & saving germans!!  

 

Thu, 06/21/2012 - 12:38 | Link to Comment covert
covert's picture

spain will do fine.

http://covert.ias3.com/expose/

Thu, 06/21/2012 - 13:49 | Link to Comment youngman
youngman's picture

Sometimes you feel like a HUT....sometimes you don´t.............

Thu, 06/21/2012 - 11:57 | Link to Comment sUccRAM
sUccRAM's picture

He says: O.W.: 16 - 25 M €   R.B.: 25.6 M €! ---- In the worst cases: O.W.: 51 - 62 M. € and R.B.: 51.8 M. €. 

 

Far below the 100M € that estimated Eurogroup! 

 

Thu, 06/21/2012 - 12:01 | Link to Comment magpie
magpie's picture

Who gets to keep the difference ?

Thu, 06/21/2012 - 12:03 | Link to Comment bigwavedave
bigwavedave's picture

Ah they stressed tested it. And there I was thinking they were going to mark-to-market the actual balance sheets. Doh!

Thu, 06/21/2012 - 12:05 | Link to Comment sUccRAM
sUccRAM's picture

"Mark-to-market"? Which market? There is no market in Spain right now. 

Thu, 06/21/2012 - 12:59 | Link to Comment Iconomissed
Iconomissed's picture

New Clarke and Dawe would concur:

http://www.youtube.com/watch?v=OrhJcqgXrlw

 

Thu, 06/21/2012 - 12:06 | Link to Comment pods
pods's picture

Guy looks like Bob Newhart.

 

Thu, 06/21/2012 - 12:06 | Link to Comment bigwavedave
bigwavedave's picture

Looks like they found some silver hidden somewhere. LOL

Thu, 06/21/2012 - 12:07 | Link to Comment Negro Primero
Negro Primero's picture

JODER FERNANDO! Many bailout scared Spaniards in the @rtve forum:

"Ronaldo lidera a Portugal ante una República Checa con Rosicky en el banquillo http://t.co/t8YJAtpd"

"Madrid acogerá su semana del Orgullo Gay del 23 de junio hasta el 1 de julio http://t.co/6Ffx4r01"

"Alonso: "Es importante ser consistente este mes, pero aquí queremos ganar" http://t.co/djeHIQud"

Thu, 06/21/2012 - 12:12 | Link to Comment Alejandrito
Alejandrito's picture

51 billions????? Well i am sure they forgot a 2 front....................................... 251 billions is more realistic.

 

http://cut.by/1je8H

Thu, 06/21/2012 - 12:24 | Link to Comment Wizard of Finance
Wizard of Finance's picture

Oliver Wyman and Roland Berger hardly have 100 employees alltogether in Spain. and they are suposedly auditing and reviewing in 30 days more than 3tn of bank assets!!

 

this exercise is ridiculous. O&W and RB should have turned down this asignment. just a minimal review would take more than 12 months to assess, with a full army of appraisers.

 

But the final outcome seems to be OK to me. these amounts would put the banks with a level of provisions ranging between 30% and 70% of the whole real estate portfolios. 

 

Using 19bn Bankia needs as template is a huge mistake. Out of this amount, 5bn is to correct the accounting fraud of deferred tax assets (unique to Bankia), another 5bn for their industrial Portfolio (also unique to Bankia, and I would like to see same criteria applied to all financial institutions in Europe!!) and rest is used to pay for the towels and to raise Bankia real estate provisions to the level of Windows 2 decree ( 30% to 70% of all current-and-delinquent real estate loans)

Rest of banks do not share Bankia's miseries.  there are no new real estate loans. new mortgages are granted at LTV of 60%/70% euribor + 250bp for first residence.

 

Other than Bankia, the spanish banks have two long term main problems:

- profitability, with a huge mortgage portfolios running at euribor + 0.40%/0.50%for the next 20 years.    ( nobody will default on these conditions, specially for older mortage vintages, unless inevitable. remember universal libaility for spanish mortgages ) 

 

- liquidity. I´m seeing deposits decline, as people are spending their deposits to pay for their mortgages and lower income. not that much as bank runs, but just exhausting reserves.  

 

 

Thu, 06/21/2012 - 12:38 | Link to Comment Linus2011
Linus2011's picture

Roland Berger is Germany's number one firm in doing nice and completely senseless favour reviews and law proposals for politicians.

this consulting firm does have its fair share in the current euro mess. they are 100% corrupt. it is 100% bought and useless review.

Thu, 06/21/2012 - 12:33 | Link to Comment Negro Primero
Negro Primero's picture

OK, España no es Uganda, hasta la vista!

Thu, 06/21/2012 - 12:52 | Link to Comment Bubbles and Busts
Bubbles and Busts's picture

How can anyone expect Euro politicains and cetnral bankers to ever get in front of this crisis when they can't even openly admit to the potnetial size of the problem? Considering the constant revisions to additional capital needed for the Irish banks, the "real" number may be multiples of the "official" amount (http://bit.ly/MyuyP8). 

Europe's Leaders Should Learn From Game of Thrones
Thu, 06/21/2012 - 12:53 | Link to Comment mark7
mark7's picture

"We know very well that the cap at this conference is €100 billion even if the final need will be far higher."

Arrogant statement. Have you done some secret research in Spanish bank, that is better than results produced byt the army of researchers in Spain? I doubt that.

Thu, 06/21/2012 - 13:16 | Link to Comment timbo_em
timbo_em's picture

Army of researchers? They had less than two months to turn the whole country upside down and they were paid by the government. And if it's only 60 bn max, shouldn't Spain be able to find the money on its own.

Compared to other recent real estate bubbles (US, Ireland; and as far as I know Spain's bubble was even larger), the distress of the sovereign and other macro-economic factors (unemployment, NPA, etc.) those 60 bn seem a bit tiny.

Thu, 06/21/2012 - 13:36 | Link to Comment mark7
mark7's picture

If you listen only British/American bullshit media then you get totally wrong picture of the Spanish real-estate bubble. It is real hard to get loans in Spain from banks. You have to have real savings before you can even apply for a loan. It was not like in the US where any random beach bum could get loans very easily. Spanish banks are very prudent usually, much more so than New York or London banksters.

Thu, 06/21/2012 - 15:36 | Link to Comment Don Diego
Don Diego's picture

wrong, most people applying for mortgages would not have enough for a downpayment so they would convince a family member to vouch for them using his house as collateral. Even worse, some banks like Bankia would turn a blind eye on two mortgage applicants with no downpayment vouching for each other!

Thu, 06/21/2012 - 15:40 | Link to Comment neutrinoman
neutrinoman's picture

The link on ZH doesn't take you directly to the video. You can "Buscar" "Oliver Wyman" or just go here:

http://www.rtve.es/noticias/20120621/banca-espanola-necesita-hasta-62000...

I think this evaluation should be viewed as very preliminary.

A Spanish friend told me that, while it is true that you have always needed to prove income and have some down payment, the terms were quite easy during the bubble. Few of the borrowers would have been counted originally as "subprime" at the time of the loans. But they are nonetheless under water, in most cases by a large amount, bigger than the down payments.

Thus the Spanish situation is similar to, not "subprime" borrowers, but "prime" or "good" borrowers still ending up heavily under water in the US.

Thu, 06/21/2012 - 16:30 | Link to Comment jack stephan
jack stephan's picture

Skip the shitty chorus

http://www.melodycenta.com/download_track/2205621/Inspectah_Deck/Inspect...

plays right into your hands.

Do NOT follow this link or you will be banned from the site!