The CAM has been dealing with an intervention from the Bank of Spain, and now it is facing problems with its subsidiary in Mexico, Crédito Inmobiliario. The Mexican lender has accumulated defaults of 135 million euros, which represents 22% of its loan holdings. The company is not regulated by authorities and recorded an insolvency rate of 15%.
Crédito Inmobiliario was acquired by the CAM at the beginning of 2009, the height of the market collapse led by Lehman Brothers.
Since then, world economic issues have become more complicated and the Mexican franchise has multiplied its real estate holdings by three times thanks to increases in default payments. According to published data, they have had to eat 177 million euros. This figure represents 5.8% of current toxic assets that the bank held at the end of 2010, which equaled approximately 3 billion euros.
Despite their troubles, the Mexican subsidiary is keeping their balance sheet in the black, and it has started to get lines of credit in order to develop new projects. Still, their plans could change with the intervention back.
