Specialist
Former executive at Haya Real Estate SLU
Agenda
- NPL (non-performing loan) volume and AUM (assets under management) growth trends
- Sareb renewal dynamics with Haya Real Estate and potential changes in work and fees
- Volume and management fee trends and other new contract opportunities
- NPL-to-REO (real estate-owned) conversion dynamics and receivables collection
- Competitive dynamics vs Altamira, Solvia, Servihabitat and other servicers
- Potential M&A
Questions
1.
What are you expecting for NPL [non-performing loan] volumes in 2022? Obviously there was market disruption in 2020 and 2021 because of the various moratoria. AUM [assets under management] have decreased as transactions have continued within the client portfolios. How would you compare 2022’s expected NPLs to 2020-21 and perhaps pre-pandemic in 2019?
2.
Can Haya Real Estate service the unsecured and corporate assets competitively, or is that an ability it needs to build? Could the company benefit from those volumes?
3.
On 30 June 2021 at its nine-month update, Haya talked about servicing EUR 30bn-30.5bn AUM. Is there no corporate unsecured in that number?
4.
How easy would it be for Haya to expand into unsecured? I know you mentioned it was an opportunity and the company does have the experience from the Bankia team.
5.
What volume of unsecured might Haya be servicing by the end of 2022?
6.
How do you assess Haya’s strength in legal collection vs its peers? I think in a previous Interview [see Haya – AUM Growth & Portfolio Sales Outlook – 3 March 2021] you said Haya was a very good full-service provider but that there were other servicers who were perhaps more specialised in legal collections. Is that still a fair observation?
7.
Why isn’t Haya servicing NPLs as well as REO [real estate-owned]? Do banks prefer to give NPLs to other servicers?
8.
How competitive do you expect Sareb’s overall renewal process to be? I know one of the big servicers is already out of that process. When do you expect the result and how competitive might the outcome be?
9.
What range could the transaction fees be in? I think Haya talks about the average being 4.14% for the first nine months of 2021. Is that broadly in line with where you’d expect the Sareb renewal to be?
10.
Do brokers usually take around 3% of the fee?
11.
How might the potential composition of Sareb’s portfolio for (inaudible 30.42) compare to previous ones? Is there any difference in the assets likely to be serviced under the new contract?
12.
Do you think about Haya’s costs in relation to basis points on the transaction volume fee of 4%? Maybe 1.5- 2.5%, if that is already the agent fee. How would you contextualise the costs of collections or servicing? Do you do it on a variable basis?
13.
Haya talks about the Sareb contract constituting between 10% and 15% of revenue. We mentioned the management fee is there to cover the costs, and then you’ve got a broadly comparable transaction fee, so I would assume the EBITDA is less than that 10-15%. Is that a fair observation?
14.
How flexible is the cost base? If Haya didn’t retain the contract, which is about 40% of AUM, it won’t be 40% of the cost base dedicated to servicing that contract. How do you assess the cost base contribution? How quickly could that cost be taken out of the business if needed?
15.
What cost base contribution might the NPL platform be responsible for vs the REO business strategy?
16.
Are Haya’s NPL and REO businesses relatively separate? Would they be relatively easy to separate if somebody wanted to acquire Haya’s NPL servicing business only?
17.
How quickly could the cost base be resized if Haya didn’t retain or renew the Sareb business?
18.
How critical is the renewal of the Sareb business, reputational impact aside? You’re tying yourself into a contract with potentially less favourable economics and have to maintain the cost base to service that. Is it the worst thing in the world if Haya can’t retain that business?
19.
What is the likelihood of Haya having no contribution to the next Sareb contract? I suppose it’s unclear whether it would be the same volume as today.
20.
Does Sareb want the same number of servicers as previously? I thought it wanted fewer servicers.
21.
What are the benefits of Sareb only pursuing two servicers? I suppose that means the company’s servicers can be more competitive in pricing because it will have more volume.
22.
Do you think Haya’s current refi talks could influence Sareb’s decision? Obviously, it’s probably a question for Sareb, but do clients typically consider that kind of thing when making those decisions?
23.
Will Haya get a transaction fee on the Cajamar portfolio? It was around a EUR 0.5bn portfolio. Would you do EUR 0.5bn at the average 4% transaction fee, or would it be lower?
24.
How might consolidation play out given the context of the broader Sareb discussion?
25.
Are there more synergies with an NPL provider acquiring a REO servicer? You mentioned a possible synergy between Haya and Servihabitat. Are there many synergies when it’s a REO servicer acquiring a REO servicer?
26.
Would DoValue be an interesting partner for Haya?
27.
The last results on collections activity for receivables demonstrated a big change in working capital that apparently came from receivables per management discussion. Is that a sustainable change to the receivables process? Is this a short-term benefit that unwinds, or is it the receivables conversion you expect for the business?
28.
What is a more normalised cash conversion for servicers or Haya? Obviously, the recent cash conversion has been exceptional because of the receivables impact.
29.
How would Haya be impacted by the Unicaja-Liberbank merger, with Unicaja potentially servicing the Liberbank assets internally? Obviously, there’s a penalty for cancelling that contract.
30.
How keen will Haya be to lock up the Cajamar renewal?
