Tuesday, October 23 09:17:10
Wilbur Ross, the billionaire who's taken stakes in distressed U.S. and European lenders, said he's interested in Spanish banking assets as the country takes steps to resolve bad loans stemming from its real-estate bubble. Ross's WL Ross & Co., which holds about 10 percent of Bank of Ireland Plc. and teamed up with Richard Branson to buy part of Northern Rock Plc, is in talks "almost every week" with representatives of the large Spanish banks, he said in an interview in Abu Dhabi, without naming potential targets.
"Maybe next year will be the year for Spain," he said. "We've been doing a lot of work in Spain. We've put a lot of time and effort into Spain but haven't put any money in yet." Officials in the euro zone's fourth-largest economy are setting up a bad bank, similar to one in Ireland, to help lenders shed soured real estate loans and to boost lending growth. The government is seeking to purge about 180 billion euros ($235 billion) of bad assets linked to property, which its central bank says remain on lenders' balance sheets. "Spain has yet to go through the catharsis of real estate," Ross said. "I don't know if it'll be another six months or another 12 months or whatever, but at some point we might very well do something in Spain."
Ross's firm invested about 350 million pounds ($560 million) with Branson's Virgin Money to take over the retail operations of Northern Rock, the British bank whose reliance on short-term financing resulted in its becoming the first casualty of the global liquidity crunch. Ross was also among five investors who took a 35 percent stake in Bank of Ireland, one of six lenders guaranteed by taxpayers in 2008, for 1.1 billion euros. He has a board seat.
He has taken stakes in institutions such as Oregon's Cascade Bancorp, New Jersey's Sun Bancorp, and union-owned Amalgamated Bank in New York, all of which required financial aid after writing down bad real estate loans according to Bloomberg. Spain secured a 100 billion-euro financial-sector lifeline earlier this year and may request a European Union bailout, putting the region's newest crisis-fighting tools to the test in an economy that's twice the combined size of Greece, Ireland and Portugal.