Leverage: how does the loan boost the profitability of a rental investment?

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The leverage effect of a rental investment , what is it? A magic power or a Pokémon? Not quite…
In fact, leverage is a financial notion . You are disappointed? Rest assured, you will not be when you understand how it enriches you with money from the bank . This is called real magic!

If you have decided to invest in a property , you will sooner or later ask the question of its financing. So you have two options: tap into your savings or borrow from the bank.
Your first intuition may be to say, “Youpi, my savings are enough to buy this house! Not to use the loan will save me money. Fault ! This thought is natural but misleading! Borrowing from the bank allows you to operate this famous leverage that alleviates the burden on your shoulders and increases the profitability of the rental investment.

To understand, let’s start from the beginning.

1. Saving or borrowing is the question

Very often, you do not have enough savings to buy the property you dreamed of. In this case, two choices are available to you: give up your wish or borrow what you miss. The last mechanism is called leverage: it allows you to buy a property above your means by the debt. And as a bonus, the profitability of your investment will be boosted!

Be careful because there is a golden rule , a prerequisite for this effect to work righteously. Make sure that the cost of your loan (including borrower insurance ) is lower than the return on your investment.
In other words, the debt should not cost more than what it brings you.


Jacques wants to take out a mortgage of 500 000 €. His bank offers him a real estate rate of 1.50% over 25 years. The borrower insurance amounts to 0.50%. The cost of his credit is therefore 2%.
When he looks at the property income and rents that this new house will bring him, he finds a profitability of 4%.
The answer is obvious: Jacques’ cost of credit is well below his future profits. If he accepts the proposal of his bank, the leverage will lavish his good works.

2. Leverage: how does it work?

As a lever helps you lift a heavy mass, the bank supports you in your investment. The longer it is, the easier the load is to move: the more important your personal contribution is, the more advantageous the borrowing conditions will be.
You do not have to finance alone, with the strength of your arms, your property. Banks lend easily, even if your contribution is low , and ensures you in the event of death or any other unforeseen (which is not the case of financing by savings). In addition, the rents received on this investment will allow you to repay the credit : your cash remains untouched!


An alpine chalet is 750 000 € but your savings are not enough to cover the costs in one go. Your bank offers you a mortgage at 1.74% over 20 years in return for a contribution of 75 000 €, or 10% of the investment.
Calculation of leverage: (Amount of investment) / (Personal Contribution) = (750,000) / (75,000) = 10
You plan to rent this cottage which will ensure a yield of 6% per year. Thus, your contribution of departure, 75000 €, brings you back: 10 x 6% = 60%. Only the real estate market allows such returns, we should not miss!

3. With leverage, you are always winners!

Take an example over several years and follow the evolution of your income on a Paris apartment, one of your rental investments financed by the loan. You bought it € 100,000 with a personal contribution of € 15,000 and a loan of € 85,000 at 2% per year over 15 years.
You decide to rent this nice apartment at 800 € per month (9 600 € per year) knowing that you will have to pay charges of 2500 € per year.
To be sure to always win, let’s imagine a case where real estate prices fall by 2% per year and rents and expenses by 1.5% per year.

Year Property income loads Refund your loan Your Cash Flow
1 € 9,600 € 2,500 $ 5,581 $ 1,519
2 $ 9,408 $ 2,463 $ 5,581 € 1,365
3 € 9,220 $ 2,426 $ 5,581 $ 1,213
4 € 9,035 $ 2,389 $ 5,581 $ 1,065
5 € 8,855 $ 2,353 $ 5,581 $ 920
6 € 8,678 € 2,318 $ 5,581 $ 779
7 $ 8,504 $ 2,283 $ 5,581 $ 640
8 € 8,334 $ 2,249 $ 5,581 $ 504
9 $ 8,167 $ 2,215 $ 5,581 $ 371
10 € 8,004 € 2,182 $ 5,581 $ 241
11 $ 7,844 $ 2,149 $ 5,581 $ 114
12 € 7,687 $ 2,117 $ 5,581 – € 11
13 € 7,533 € 2,085 $ 5,581 – € 133
14 $ 7,383 € 2,054 $ 5,581 – € 252
15 € 7,235 € 2,023 $ 5,581 – € 369
16 € 7,090 € 1,993 $ 5,581 – € 484
17 $ 6,948 € 1,963 $ 5,581 – € 596
18 $ 6,809 € 1,934 $ 5,581 – € 705
19 € 6,673 € 1,905 $ 5,581 – € 812
20 € 6,540 € 1,876 $ 5,581 – € 917
TOTAL       $ 4,451

The result ? Your cash flow is positive ! Finally, the loan did not encroach on your cash and you could even get rich with the money from the bank. This, you have understood, thanks to the action of leverage, which no longer has any secrets for you now.

To remember

Leverage allows you to invest with money you do not have while enriching you!

A golden rule: cost of borrowing and profitability of your investment!

The loan is even often strongly advised, you will be winners!

Real estate: tips before buying a house or an apartment

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Are you about to invest in real estate to rent, or buy your main home, and that scares you? Many formalities and steps are actually expected. Here are all our tips to make your project a success.

find all our advice before you start buying real estate.

1, 2, 3 … anticipate, prepare, budget

The success of a real estate project comes first and foremost by good preparation. To avoid wasting time with unnecessary visits, it is essential to fix your project and budget your purchase. Are you interested in selling a house in Nogent sur Marne Viselets ? Would you prefer a house in the countryside or an apartment in the city center? The first step is to determine your search criteria to see the right ads and find the ideal property. Prior to any research, it is also necessary to set your purchase budget. Everything is a question of anticipation! A real estate purchase must first and foremost be planned and supervised.

4, 5, 6 … search, visit, negotiate

Once the search criteria are defined and the budget granted to the purchase determined, it remains only to go around the ads, to visit, compare the offers and estimates of apartments in Vieux Saint Maur (to see ads it’s here: https://www.orpi.com/mgmimmobilier/estimation-d-a-apartment-in-the-years-saint-maur-des-fosses ), if it’s there that you want to buy , and especially not to hurry. Advice from real estate agents or notaries is appreciated by those who wish to find the property of their dreams very quickly.

You want to buy a property in the Paris region?? To target your searches according to your budget, also take the time to inquire about the price of m² in La Varenne Saint Hilaire or Boissy Saint Léger, if you extend your search field to 94.

Once the rare pearl is found, the negotiation phase begins. Any price of real estate is negotiable, so try your luck.

7, 8, 9 … finance, verify, mandate

To acquire their home, the majority of French people resort to a mortgage. To find the most interesting offer in terms of borrowing, go around the lenders, and compare their offers. To obtain the most interesting rate, do not hesitate to prepare a solid financing file. Once the sales agreement signed, you have eleven days to retract, think about revisiting the housing in this time to verify that it meets your criteria. Finally, choose your notary to look after your interests.

10 … smile

Smile, you own.

Carrez law and real estate: understand the diagnosis

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December 18, 1996 is made to facilitate the acquisition of a property by a buyer. It is also called “Carrez measurement” and allows the sale of real estate over 8 m. Thus, to make the obligatory diagnosis according to the law Carrez, it is to determine if the acquired property meets certain precise criteria.

Delimitation of the diagnosis

This law is made for all real estate sellers throughout France. The house must be more than 8 m to benefit from the measurement Carrez and thus estimate the property . Important advice on this area: it must clearly be mentioned in the lease. The measurement also stipulates that only the floors of closed and covered premises with a height higher than 1.80 m, are considered valid. Thus, cellars, garages and car parks are not part of it.

As part of a house for sale and a mandatory diagnosis, if the property is for rent or if there is an intention to acquire land, Carrez law will not be useful and the law Boutin can then serve . If no measuring system is taken, the sale may be canceled.

In addition, if an error in the measurement system is found, the purchaser will be able to request a reduction in the initial price for the sale of the property. And one last parameter to respect is that the property in question will be regulated under the system of co-ownership.

Professionalism in Carrez Diagnostics

To be fixed on the amounts to disburse in the recourse to the best diagnoser, it is possible to apply to specialists in estimate. Rates vary depending on the type and location of the house. Ask your independent real estate agent , he will advise you the appropriate professional.

For example, for a type 1 house in Paris, € 74 will be required, while a type 4 apartment will require € 94. This is an overview of expenses and it is possible to find more on specialized websites, for free.

For a better diagnosis loi carrez, some data on the property are necessary. It will be necessary in particular to mention if it is a house or an apartment, in town or in province, the number of rooms, the date of construction, etc. If a diagnostician must evaluate several goods, he can apply a discount system and this can be up to 35%.

However, we must be aware that professionals offering a low real estate diagnostic rate are those who will stay as short as possible on a case. As a result, the diagnosis can be ill-established and the consequences can be harmful for the owner. Make the good choice!

Focus on Noaho, Lyon real estate developer

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Noaho is a company created in 2009 that has quickly established itself in the Lyon real estate market. Visionary promoter, Noaho offers new programs in accordance with the problems of its customers and partners. With large development projects, the company that sees things in large appears as an interesting new alternative for the market. Zoom on a promoter who favors investments.

Noaho Overview

The company Noaho starts from a simple observation: the real estate sector is no longer in phase with the expectations of the 21st century, both at the human level and at the environmental level. Visionary real estate developer, Noaho relies on strong convictions to become a responsible urban actor but also an initiator of new behaviors in construction.

Thus, each of Noaho’s residences complies with the BBC (Low Consumption Building) standard, which is immediately part of the specifications imposed on local design architects working in partnership with the company. These constructions follow the logic of major projects implemented by the Lyon metropolis, which aim to promote social diversity, respect for the environment and the spirit of innovation, three values ​​that are crucial for Noaho.

To continue its development in the better build, Noaho relies on its team of 22 experts in real estate, as well as a rewarding partnership with Sogeprom, a subsidiary of Société Générale. This partnership brings to the company an indisputable financial solidity and a strong experience on the whole of the real estate markets (student residences, hotel residences, commercial real estate, commercial urbanism, etc.), which allow Noaho to put implementation of mixed and innovative projects.

With many criteria of requirements on the architectural quality of buildings, their energy consumption, product design, cost control and site management, the Noaho residences make the property of virtuous housing for the environment accessible.

Examples of new real estate programs

Here is one of Noaho’s various programs: So ‘/ In, a new residence in Ecully .

The developer Noaho did not choose the city of Ecully randomly: with several higher institutions, many schools, multiple institutions for early childhood and the elderly and a shopping center, this city of west of Lyon can accommodate families as well as couples without children and students.

The So ‘/ In program is very well served by public transport as well as the TER. Located a 10-minute drive from Bellecour, Lyon stronghold, the residence offers the double advantage of the quiet periphery and dynamism of the center of Lyon.

As for the residence itself, it complies with the BBC (Low Energy Consumption Building) standards and is part of a natural environment thanks to the vegetated islands. The clean lines of the buildings hide 26 homes, with T1 of about 30m2, T3 from 60 to 70 m2 and T5 of about 96m2. For the comfort of future residents, all accommodations are composed of:

  • Electric shutters
  • Tiles in living rooms
  • Parquet in the rooms
  • Earthenware in the bathrooms
  • Terraces made of wood or composite boards
  • Individual gas heating

In addition to this program, Noaho has already completed more than a dozen residences and continues to imagine new projects, such as the “MYST” program which will give birth to a residence in Saint Priest . Here are some other examples of projects:

With a real estate developer also inspired, it becomes easy to invest serenely while enjoying a tailor-made and 100% personalized support.

Aldi enters real estate business

They still shape the image of German cities and villages: Ten years ago, food discounters such as Aldi or Lidl set the principle of low-rise construction in the construction of new markets. They opened wide, low markets, preferably on the arterial roads. The typical, single-storey branches with pitched roof are one hundred times in Germany. But at least in big cities the time of the low buildings comes to an end. If you open a new supermarket these days, you will also be planning offices or apartments on the upper floors. The fact that discounters become property managers in a sense is in line with the trend.

At the same time, the retail chain Aldi Nord wants to join in as well. The discounter announced on Wednesday to enter the business with the so-called project development. By 2030, Aldi wants to build at least 20 new branches in Berlin, on or at which apartments are to be created. Overall, the retailer wants to create a good 2,000 new apartments in the capital. The necessary land belongs Aldi partially for decades. The company does not want to sell the apartments according to their own information, but rent.

With the project Aldi follows its competitors in the trade. Lidl, Rewe, Edeka, yes, just about all major discounters and supermarkets now rent apartments. They thus follow the guidelines of the cities and municipalities. These increasingly rely on compaction: they want free space to be used as effectively as possible. As a result, traders are building up and building multi-storey buildings, which will inevitably house many different tenants.

The industry is reacting to the high demand for apartments. Big cities like Berlin have grown by tens of thousands in recent years, mainly because young people are moving to the cities for study or job. Added to this is immigration from abroad. At the same time, many investors are investing more in real estate because construction rates are low, and fixed-income investments are unlikely to yield returns. As a result, project developers are tearing up building plots in major cities.

“The situation in and around Berlin affects us in two ways,” says Jörg Michalek, head of the Aldi real estate administration. The retail chain wants to expand in the capital. However, it is increasingly difficult to find suitable locations for new branches. In addition, owners today demand significantly higher rents for ground floor shops in many urban centers. “Of course, we want to be there at the highest possible frequency for our customers,” says Michalek. “The combination of Aldi markets and connected living space is therefore a consistent and, above all, future-oriented solution.”

However, investments such as those of Aldi Nord also tie up capital that is no longer available elsewhere. Such arguments, however, seem to take a back seat when it comes to preempting the competition. “Part of the strategy is to have locations that would otherwise go to the competitors,” says Joachim Stumpf of the retailer BBE in Munich. The rental of housing has the advantage for discounters and supermarkets to be close to the customer. They move with the people back to the cities and thus follow the trend towards urbanization.

In addition, it is cheaper to buy in many places than to pay high and rising rents. Therefore, all major grocers are currently expanding their real estate holdings. Rewe, for example, purchased six specialized market centers in western and southern Germany at the beginning of the year; At each of the sites, Rewe itself is the main tenant. Although objects with living space are an exception for the Cologne retail chain. “Basically, it’s not part of our real estate strategy to acquire housing,” says a spokesman. Nevertheless, Rewe’s expansion strategy is also open to more complex locations that include housing – especially in good city center locations.

Initially, Aldi Nord plans to implement two projects in Neukölln and Lichtenberg, where 200 new apartments are to be built on and in their own markets. At another 15 locations in Berlin, the retail chain is already planning new combinations of branch and apartments. “We want to actively support the densification of Berlin and the ecological urban redevelopment,” says Michalek. The combination of new apartments and Aldi markets creates “added value for the whole of Berlin”.

Opinions on Inveslar

Our opinion about investing is positive, because you can see that there have already been success stories in investments made from this platform. On the main page you can see some of the achievements. As for example investments that have reached a yield of 16% per year .

If that performance is compared with other types of investments, such as investment in fixed income or investment funds, it is much higher in most cases. The 16% profit in the portfolio of a stock market investor, if it is a managed account without looking for many risks, would be a very high profit to which few investors can aspire.

How does it work?

The platform publishes homes that they think may be profitable in the case of purchase for their speculation. Investors who register on the page, all together put an amount of money, in order to arrive at the price of the purchase of the home.

What are the advantages of this investment model?

It is an investment model that does not have as many risks compared to other types of investments, such as variable income or investments in the stock market. It is also an investment model in which the opportunity is offered to people who can not make speculation in a home, with their only capital.

Another advantage of Inveslar is to be able to diversify into several homes. So that the level of risk can be reduced in some cases.

Who are the CEOs of this company?

The founders of Inveslar are: Carles Serradell, Didac Figueras and Robert Stoelzaed.


Inveslar is a real estate investment portal, in which you can access from people who want to start with € 100, to people who want to start with higher amounts.

EE Real Estate Forum

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On November 26, the URE Club business association with the publishing house Europaproperty.com will hold the EE Real Estate Forum for Eastern Real Estate Companies . This year the main theme of the event will be “Residential Real Estate as a Driver of the Regional Economy Growth”. The forum will be held at the InterContinental Hotel for the fourth time.

The event will bring together professionals from the real estate markets of Ukraine, Kazakhstan, Azerbaijan, Georgia, Belarus, Moldova and Poland.

Within the framework of the event, it is planned to organize trilateral dialogue between business, officials and the public.

Why Should I Visit Flatfy Residential Day?

  • Annually, the event collects recognized world experts in real estate, architecture and design, consulting and design companies at its site.
  • The platform brings together professionals with many years of experience. You will be able to hear about the legal and economic aspects of real estate market development in the region; about problems and engines of urbanization; about the social orientation of development and possible dividends for business; about effective sales strategies.
  • Ability to expand business contacts, get up-to-date information on the situation on real estate markets in other countries, understand the trends to address current real estate issues.

“In the realities of the current law” On the complex reconstruction of neighborhoods (districts) of an outdated housing stock “and started a program of construction of new housing on the site of houses older than 50 years, real estate from a highly profitable business turns into a driver of GDP growth and a base for saving savings not only for business, but and the income of households, which is why the EE Real Estate Forum is a significant event and an important tool of the industry, which allows not only to designate the landscape and the alignment of forces, to determine the growing trends, as well as to understand nichels ing market are homogeneous and clusters, apart from the obvious (residential, retail and commercial real estate) formed today “- said Daniel Vladov, a member of the supervisory board of URE, CEO of DCH Infrastructure & Real Estate.

In the Forum program , including:

  • Discussion of legal aspects and relations with state authorities when dealing with an investor.
  • Issues of urbanization and urban development.
  • Investment discussion panel, which will discuss the main opportunities for investors in the region and tools for attracting foreign investment.
  • Flatfy, it-startup , will conduct a comparative review of residential real estate segment by country in the panel discussion panel.

The event program, developed by experts from Europaproperty.com together with URE Club , whose successful experience in the development market has been more than 10 years old, aims to provide guests and participants with reliable information about each region in order to assess the investment attractiveness of each.

Real estate agents will become: How do I start my own business with real estate?

Dream job real estate agent? In TV evening programs such as “Rent, Buy, Live” is the professional life of brokers who move with their customers from object to object, presented in detail. It seems varied, full of interesting real estate and people and depending on the price segment also extremely lucrative to work as a broker. What are the prerequisites for this job and what do the training and qualification look like?

The real estate industry, the unknown entity

Although many in the real estate industry speak very positively of the brokerage profession, the vast majority of potential junior staff have no real picture of it. According to a student survey conducted in 2016 among BWL, architecture and construction project management students, most of the respondents could not name real estate companies by name and did not know how to describe the different occupational profiles in the industry.

However, taking entrepreneurial risk as a founder does not seem to be unattractive among technology students: a good third could imagine starting as a company founder or freelancer. The industry has quite a few professions to offer: project developers, portfolio managers, property managers, fund advisors, real estate valuers or property managers. The real estate agent is still the best known among them. Enlightenment work is necessary, because needs and career opportunities are still sufficient. Real estate trading is increasingly taking place in economically uncertain times.

Tasks and challenges of the profession Realtor

A real estate agent has the task of providing freestanding real estate objects to suitable potential buyers or tenants. These can be houses, commercial spaces or apartments, but also houseboats or yachts. Usually he mediates between the real estate owners who want to sell an object and buyers or tenants who are looking for a suitable object for their own use or their company.

Many prospective buyers are looking for professional traders via the large online portals. So you can already make a selection filtered by regions and preferences. For real estate agents themselves such platforms are in addition to their own website (ideally internationally compatible) a great way to present themselves to interested customers.

A professional and competent appearance is indispensable for a real estate agent. Provide competent advice, mediate between the parties and manage the property – brokers have a whole range of tasks to complete. Business skills are just as important as empathy. A successful sale requires that all pages have been satisfied. The most important social attributes of this profession:

  • Excellent communication skills
  • sales talent
  • Empathy and commitment
  • Constant readiness to learn
  • responsibility

Broker permit and business registration

In order to become a real estate agent, there is no regular training or a specific school leaving certificate. However, an absolute prerequisite for being able to work as a real estate agent is the official permit under Section 34 c of the Industrial Code, the so-called broker permit. Here the broker candidate is certified that he was involved in no illegal or fraudulent processes in the past five years. Unsecured financial circumstances and insolvency proceedings are also excluded with an issued broker permit.

The exact fees for obtaining a broker permit vary depending on the city issuing the certificate. Overall, an applicant can count on a medium three-digit sum.

Anyone who intends to become self-employed as a real estate agent or to register their own business should obtain detailed information from the trade office in advance about the requirements . For a broker, a simple business registration is not enough. This is a trade subject to authorization because the legislator classifies this field of work as particularly sensitive. For all real estate agents, this business license exists, this is not a free profession.

Expertise and training paths

A broker needs a lot of expertise in addition to personal qualifications. So also newcomers with the corresponding will in this profession can be successful. Every aspirant should acquire extensive knowledge of the industry. An appropriate study such as real estate or real estate management are a good preparation, as well as a vocational training as a real estate agent or woman. Other business studies or commercial training are also possible.

The expertise of a professional real estate agent is extensive. Thus, for a sufficient valuation of a real estate object building technical knowledge as well as good knowledge of the regional conditions in which the broker acts. For example, he can offer better advice on current market prices. Legal aspects of building law or insurance issues should not be unfamiliar to brokers. In a land sale, the topic of mortgage lending plays a major role.

With the breadth of potential expertise, it is advisable for each broker to specialize, that can be on a specific type of real estate, on commercial properties or on a particular region. The determination of a specific target group can secure the clientele permanently.

Become self-employed successfully

Most estate agents are self-employed. It is important to enter the profession first. Many estate agents are self-employed within a franchise . Here it is important to present your own expertise and area of ​​expertise openly. Hiring highly professional internet advertisements and being represented in various networks is part of the job. An own office is from a certain order of magnitude also indispensable.

Earnings opportunities and prospects

A real estate agent is always paid by the one who has commissioned him with the sale or mediation. A fixed salary is rare, if not impossible, in the industry. The attractiveness of the commissions gives enough motivation to do his best. A typical commission is three to five percent of the sales value achieved. For rentals this is at two cold rents. Depending on the region, however, these values ​​are very different. Here applies what the broker has agreed with the client, usually the seller.

The brokerage is fast, especially in expensive real estate a considerable amount. When it comes to good properties, a broker sometimes finishes earning € 10,000 – in a relatively short period of time. Anyone who specializes in luxury real estate, even in perspective can rise to the wealthy. But as lucrative as the broker business may seem, success does not come overnight. A good deal of stamina, patience and a thick coat are absolutely necessary to gain a foothold here. A high level of commitment and dedication, however, can pay off in the long run.

The real estate portals believe that the mortgage data show the “good” moment of the sales

The main real estate portals (idealista, fotocasa and pisos.com) believe that the mortgage concession data published this Thursday, which show a rise of 9.2% in January, reflect the “good health” of the mortgage market and demonstrate the good moment through which the sale of houses go through.

In particular, the idealist head of studies, Fernando Encinar, has pointed out that the mortgage concession statistics show that the growth registered by the entire sector in 2017 is “sustainable and in good health”.

In addition, Encinar considers that the increase in the number of mortgages is “closely” related to the sale of homes and not so much with a change in the mortgage concession policies of the financial sector.

“The mix between mortgages at fixed and variable rates remains stable and the rates at which these loans are granted continue to fall, as a result of competition among banking entities,” Encinar underlined, after stating that it is foreseeable that in the medium term increase the fixed rates by the end of the debt purchase of the European Central Bank (ECB).

For its part, the director of studies of fotocasa, Beatriz Toribio, believes that the granting of mortgages is consolidating at very positive levels, “fruit of the interest of banks to lend money in the context of liquidity that lives the country.”

Looking ahead to the end of this year, Toribio expects growth in “more moderate” financing due to the normalization of the market, but expects the trend to remain “positive”.

It has also highlighted the role that fixed-rate mortgages are playing, which have gone from being a “non-existent” product to representing almost four out of ten mortgages that are signed each month.

Finally, the head of studies of pisos.com, Ferran Font, has indicated that the data for the month of January show “the return to year-on-year growth” and break with the trend of the last two months of 2017, when there were falls and flat growth compared to 2016.

In addition, he said that both the average amount and the borrowed capital are drawing an “optimistic” scenario for the housing market, because, according to Font, the loans continue to reach buyers and climb positions, “which shows the aversion to buyers risk”.

CaixaBank receives 28 requests for credit for new real estate developments in the Region in 2015

28 requests for credit for new real estate developments in its territorial branch of the Valencian Community so far this year, something that “had not happened in the last five years”, in the words of its general director, Juan Antonio Alcaraz, who has remarked that “the demand for credit continues to be met” and “would like there to be more”.

This was indicated this Tuesday at a luncheon of the Spanish Association of Managers, of which he is vice president, to questions during the colloquium about what has to happen so that the business credit flows and stops being granted “with dropper”.

Alcaraz, that in his initial intervention has defended that the banks always want to give credit although “another thing is that they can not because there is not enough solvent demand” or “liquidity, in some cases”, has remarked that the credits are the sales of the sector and try “every day to give all the credit” possible.

“Capital and liquidity we have it in abundance”, he added, and hence, that his daily objective is “to give credit”, although with the “problem” that “solvent credit demand there is the one”.

According to Alcaraz, “the one that is there is not only attended, but because there is little solvent demand, or that there is, and many competitors that want to meet it”, it turns to the “dangerous process” of which the entities fight to attract it and provoke a decrease in prices.

In addition, he pointed out that “demand for refinancing during the crisis has been a lot” and now there is “little investment in growth projects that do not have to do with refinancing”, to then emphasize that “even in a sector that has suffered more than any other such restrictions, such as real estate, there is a certain demand that is obviously met to the extent that the projects meet all the characteristics “required.


Integration of valencia bank

Regarding the integration of Banco de Valencia, he stressed that it led to an “increase in positions” in the Comunitat and increased its market share in this autonomy from 13.3 to 18.5 percent in clients from 2012 to 2013, from 6.3 to 11.8 percent in deposits and from 6.4 to 10.5 percent in loans.

Asked about the reasons for maintaining that commercial brand in Valencia, Alcaraz has ensured that his analysis of this issue “goes beyond Banco de Valencia”. Thus, he cited the case of Banca Cívica, in which they opted to recover the brands of the entities of origin due to their greater link with the territories, and pointed out that, with Banco de Valencia, they applied “the same criteria”.

In this sense, it has highlighted that being a brand that “has value”, is “rooted” and is “historical”, they decided to keep it in the province of Valencia and in Murcia, to recover Banco de Murcia.

At the end of 2014, its share in the Comunitat was 18.3 percent in clients, 17.5 percent in payrolls, 9.9 percent in pensions, 25.6 percent in self-employed, 10.6 percent in credits and 12.3 percent in deposits. 1,900 people employed in this autonomy, where it has 434 offices, eight banking centers, three private banking companies and 1.46 million clients, and in which its Welfare Projects invests 25 million a year.

In his lecture on the restructuring of the financial system, he has reviewed the “prodigious decade of growth” based on the real estate sector, in which entities borrowed to finance this growth, from 1996 to 2006, until the “stop” for the ” whirlwind “generated by the subprime mortgage crisis.

Return to offices and employees of 1996

Since then, the sector has reduced its installed capacity “in offices just over 30 percent and in number of employees by 26 percent”, with “71,000 employees of banking and cash that has been carried out the restructuring”, until approaching to the figures of branches and personnel of 1996, previous to the “bonanza”.

According to Alcaraz, also “there has been a loss, a deterioration, of almost 20 percent of the value of all the assets”, in a process in which the banks have “adjusted” and are already “close to what would be prudent : I lend money from my clients but I am not going to borrow to give loans “. “The entities are much healthier and stronger,” he has ruled.

It has also affected the high levels of regulation and capital requirements implemented by the European authorities, which “make it difficult for entities to grow again”, and has blamed their intention to complicate this business to avoid another “financial crisis that could jeopardize the public debt. “

In another order of things, asked during the colloquium for the possibility of opening in the afternoon, has stated that there is “certain morbid” about it in the sector, but “this debate does not respond to the relationship with customers and employees”, that “by agreement and pact” already opens one afternoon a week and, in addition, reached an agreement whereby part of its staff has “flexible hours”.