Sareb to Redeem €3.000 Million in Debt Guarantees

17/03/2014 – Expansion

 Sareb´s chairwoman, Belen Romana, assures that throughout 2013 “the bad bank has achieved a great part of the targets set for that year”. Now, the company begins new phase aiming at speeding sales up and better management of the assets and credits in its books in order to maximize their price at the moment of sale. (…).

One of the 2013 hits turned out to be revenue of €3.800 million. From the amount, €200 million will be intended for banks as management commission, €1.200 million to remunerate debt guarantees issued by the Government and handed over by Sareb to the banks in exchange for the assets transfers. €2.000 will be destined for redeeming publicly backed bonds.

“In 2014, we wish to raise by 50% the repayable debt up to €3.000 million”, explains Romana. (…) At the beginning of its lifespan, Sareb issued €50 million in debt guarantees.

About two thirds of the revenues (€400 million granted to developers) come from the financial asset portfolio. “Large part of it is outstanding”. In case when the debtor cannot pay-off their credit, there is a broad range of alternatives. “For us, the most important is the disappearance of two things from the banking field: cash generation and asset as collateral.”

Sareb, for example, has run the Sales Revitalization Plans to support developers in marketing terms and the Opportunity Plan (arrangements with small debtors allowing them to redeem the debt with a part of it forgiven).

In regard to real estate assets, the bad bank sold 9.000 units in 2013 through the retail channel. Good banks granted for them 600 mortgages, given that for the high number of flats, 50% of them were paid in cash.

“We are among the top 10 property sellers in the country. This year we wish to raise the sales by 15% and enter the top 5 ranking”.

The focus will be set upon Madrid, Barcelona, Alicante, Valencia and Malaga. One shall not forget about the investment of €100 million for finishing building works and constructing 3.000 new houses.

Also, more emphasis will be put on plot management and rent. Right now, Sareb has got 600 assets for rent. (…).

The head of the bad bank highlights that asset sales in 2013 brought a positive ebidta. “We need a balance between volume and margin (…).”

In the upcoming weeks, Sareb will make public its annual book results. (…) In legal terms, the bank is obliged to update business plan each year. The most recent one predicts extending yield by 13-14%  and a 5-year amortization of 50% of the debt guarantees, apart from the subordinated debt compensation and payment of dividends (…).


To learn more about the Spanish bad bank, visit our SAREB section. 


Original article: Expansión (M. Martínez/S. Arancibia)

Translation: AURA REE