U.S. billionaire Wilbur Ross said he will consider investing in Spanish banks amid signs the country is following Ireland in starting “to come to grips” with its financial crisis.
WL Ross & Co.’s purchase of a 9.3 percent stake in Bank of Ireland (BKIR) Plc in 2011 “is turning out to be a very good investment,” Ross said in an interview with Francine Lacqua and Manus Cranny on Bloomberg Television’s “The Pulse” today. He said the stock has risen more than 80 percent since then amid signs of stabilization in Ireland’s export-oriented economy.
“I’m going to Spain later on this week because, I think, Spain too has a real economy,” Ross said. “It’s got terrible problems, 27 percent unemployment and a banking system that I think is just beginning to recognize the severity of its problems.”
Spain’s real-estate market is nearing a bottom, Banco Santander SA, the nation’s biggest bank, said last month, after home prices fell more by than a third from their 2007 peak. Ross, who originally indicated in October he’s interested in investing in Spain’s financial industry, will consider buying assets put up for sale by Sareb, the country’s bad bank, as well as investing in distressed loans and banks, he said today.
Spain created Sareb to help lenders facing capital shortages sell assets as part of the commitments the government agreed to last year in return for a 100 billion-euro ($129 billion) European Union bailout. The bad bank plans to sell its first 1.5 billion euros of assets this year, out of a total of 50.4 billion euros of assets turned over to it by state-aided lenders, Economy Minister Luis de Guindos said March 12.
Ireland set up a similar bad bank, the National Asset Management Agency, in 2009 to absorb about 72 billion euros of commercial real-estate loans from the country’s debt-laden banks. The sovereign and its largest banks, Bank of Ireland and Allied Irish Banks Plc, each returned to public debt markets last year for the first time since the country received a 67.5 billion-euro international bailout in 2010.
While Greece and Italy under former Prime Minister Mario Monti have done a “good job” reining in their finances, France “going in the opposite direction” to other European countries that are seeking to become more productive and competitive, Ross said.
France “is doing a very good job discouraging foreign direct investment from coming in,” Ross said. “We’re looking at southern Europe.”
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