Sareb foresees in its business plan that it will have losses only during its first year of operation. Belen Romana, president of the so called “bad bank” and Walter de Luna, its general director have explained this in a press conference after the approval of the revised business plan by its managing board.
Romana has insisted that Sareb will be “another player” in the real estate sector, and will not determine prices. “We will not generate the prices, we will be an actor that will compete with the others and we will send at market prices in order to attain our objectives”, he has pointed out.
On Wednesday the managing board approved the business plan that will be in force during the 15 years of operation of the institution, with detailed information about the acquired portfolio of assets – from group 1 (Bankia, Catalunya Banc, NCG Banco-Banco Gallego and Banco de Valencia) and group 2 (Liberbank, BMN, Ceiss and Caja3), as well as the features of the emissions of guaranteed and subordinate debt.
The approved business plan (…) defines that three quarters of the income will come from the sale of real estate assets, and the rest from loans.
In its first five years of operation, Sareb plans to sell half of its portfolio of properties, around 42.500 units. It also plans to set aside some properties for the rental market.
The plan also contemplates an accumulated profit for the shareholders between 13% and 14%, similar to the one established in the initial document.
The approval of the business plan is an important step in the short existence of Sareb and allows the company to concentrate on the management of its assets, once the capital structure and the composition of the shareholders have been completed.
The approval also complies with one of the recommendations issued by the IMF and the European Commission who, in their last report on the Spanish banking restructuring, valued the importance of a “robust and credible” business plan in order to lay the foundation of Sareb´s success.
The board of administration has also approved the Policy of Conflicts of Interest and of Linked Operations, which intends “to preserve at any time the interest of the company in the decision making by the managing directors of the company”.
As indicated by Sareb, this policy goes beyond “the demand of abstention imposed by the Law of Corporations, as it prevents that those members of the board affected by a conflict of interest may have access to the information concerning the operation or decision being discussed”.
Additionally, it establishes a system of periodical communication of activities which will allow the prevention and detection of potential conflicts.