Spanish bank Santander is reportedly looking to offload so-called toxic real estate assets worth up to €5 billion.

According to local paper Cinco Dias, via Reuters, the bank’s ‘Talos II’ asset portfolio is made up of bad loans backed by mortgage collateral that Santander could repossess as a consequence of defaults.

It is currently unclear what price Santander will set for the assets, or any potential discount on the sale.

The Spanish market was heavily impacted by the 2007-08 financial crash, with the country’s real estate bubble bursting at the end of 2007. In the years since, lenders have been selectively repackaging loans in an attempt to recover cash – a practice which has been accelerated by the likelihood of loans going bad following the economic slowdown and Covid-19 pandemic.

Santander is also refocusing its business, and has set aside $250 million to overhaul its investment bank over the next two years. The bank has not historically focused on investment banking, but has hired more than 100 bankers this year with about half that total coming from Credit Suisse in the wake of its shotgun sale to UBS.

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