Sareb Revises Business Plan After Straying Away From the 2013 Path

18/02/2014 – Cinco Dias

On Sunday, the managing board of Sareb met at an extraordinary session on the examination of the new business plan. Taking into account the 2013 performance, the bad bank will rename targets for 2014.

As Sareb demonstrated last year, the entity is able to sell the property in its balance sheet rapidly but still at low prices. (…).

In 2013, the bad bank named KPMG consultant company to estimate the possible transaction number. The firm reckoned nearly 7.528 houses sold, adding to total revenues with €933 million. Even though the end of the year kept everyone on tenterhooks, the target not only has been achieved but also beaten up with 9.000 dwellings sold, as the Minister of Economy, Luis de Guindos told. However, the revenues reached mere €700 million, about €233 million less than predicted for sales without the additional 1.500 houses.

The numbers show that on average Sareb sold properties for €77.777 each, juxtaposed with th price of €123.986 included in the plan by KPMG. Having in mind great discounts granted to the bad bank on bulk property acquisition by nationalized entities, benefit for Sareb was considerable.

After all, the business plan revised by KPMG estimated a 2.8% price fall in 2013, whereas the General Council of Notaries announced an 8.6% drop-off yesterday.

Sareb registered revenues of €3.800 million and 80% of the amount corresponds to asset portfolio valuation for developer companies.

In parallel, the bad bank finalized sales of a fistful of portfolios, such as the Toro (Bull) and the Teide Projects, lots consisting of  thousands of dwellings of the FAB (the Banking Restructuring Fund) with large international investors.

In spite of that, grand banks exceed or even multiply the sales of Sareb, at the same time being the bad bank´s shareholders, that occassionally causes “conflicts in interests” and critic flowing from Brussels on its strategy plan. (…).

The entrance of the international funds on the Spanish market stage, gives pockets of opportunities for all. It is said that Sareb will renew contracts with banks so that they would continue their sales to individual clients.

The bad bank is weighting up putting pressure on the property rent (presently has got 5.000 units in lease) and to invest €100 million in housing developments. The leave of Walter de Luna obviously requires filling the vacant post with a new key executive for Sareb before the 2014 business plan comes into force.

Original article: Cinco Días (Juande Portillo)

Translation: AURA REE