Annual report 2009 - Santander

156Loan-to-Value SpainAverage (52,4%)80% < LTV < 90% - 7%LTV > 90% - 8%A particularly important product in the real estate portfolio ismortgage loans to real estate developers. At the end of 2009,this amounted to EUR 12,207 million and represented around1.6% of Grupo Santander’s global credit portfolio. The exposureto this product was 9.3% less than in 2008 and 13.8% lowerthan in 2007.At the end of 2009, this portfolio of loans to real estatedevelopers had a large number of customers, with a low degreeof concentration and an appropriate level of guarantees andcoverage.Loan-to-Value: relation between the amount of the loan and the appraised value of the property.Affordability rate SpainAverage (30,8%)TE > 40% - 22%LTV < 80% - 85%The situation was as follows:• Developments completed and with the final certificate ofwork: 66.7% of outstanding risk.• Developments more than 80% completed: 14.5% ofoutstanding risk.• Developments between 50% and 80% completed: 8.9% ofoutstanding risk.• Developments less than 50% completed: only 9.8%.These figures show that this portfolio has a high degree ofcompletion in the work, with 81.2% of buildings underway withthe construction risk already surpassed or close to it.30% < TE < 40% - 24%TE < 30% - 54%In addition to the constant control by Grupo Santander’smonitoring teams, there is a technical unit specialised inmonitoring and controlling this portfolio in relation to buildingprogress, fulfilment of plans and controlling sales, as well asvalidation and control of disbursements by certifications.Affordability rate: relation between the annual payments and the customer’s net income.Lending to the construction and real estate activitysectors in SpainThese two sectors are among the most affected by thedownturn.Lending to these sectors in Spain (Banco Santander andBanesto) amounted to EUR 42,256 million. This portfolioincludes the financing of activities as diverse as the touristsector, lease-back operations, development of companies thatdepend on local and regional governments and insurance firms,among others.This portfolio of credit to the construction sector and real estatedevelopment has been submitted to the Group’s usual stresstesting exercises, the results of which are set out on page 159 ofthis report.The non-performing loan ratio of this portfolio, on the basis ofthe criteria already indicated, was 6.2%, higher than theGroup’s average ratio. Coverage stood at 45%.In addition, and in accordance with Bank of Spain guidelines,there is EUR 4,332 million of risks classified as sub-standard.Annual Report 2009 Risk management