Sareb Recorded Loss Of €663M In 2016 Despite 25% Rise In Property Sales

31 March 2017 – RTVE

Sareb recorded a loss of €663 million in 2016 due to the high costs associated with the maintenance of its portfolio and the sale of its assets at a loss, despite increasing its volume of property sales by 25%.

The entity known as the bad bank highlighted the 1% increase in revenues that it recorded, to reach €3,923 million, which allowed it to reduce its debt by €2,170 million.

The entity’s main source of income last year was its portfolio of loans to property developers, whose management generated revenues of €2,846 million. Almost three-quarters of that amount came from the repayment and sale of loans, collaboration initiatives with the property developers through the Sales Promotion Plans and the sale of properties securing loans.

Finance costs amounted to €558 million

Meanwhile, in the expense caption, the company highlighted that its finance costs carried the most weight, amounting to €558 million.

During 2016, the first year of full operation with the four servicers responsible for managing the entity’s assets (Altamira, Haya, Servihabitat and Solvia), the volume of property sales rose by 25% with respect to 2015, to a total of 14,000 units, including residential assets, land and tertiary properties.

Most of Sareb’s asset sales were concentrated in Madrid, Andalucía and Cataluña

By autonomous region, Madrid, Andalucía, Cataluña and the Community of Valencia accounted for most of the bad bank’s property sales. Similarly, Sareb managed 10,500 proposals relating to the clean-up of its credit portfolio, up by 16% compared to the previous year.

Regarding its real estate business, the company recorded revenues of €1,050 million due to the “commercial dynamism” that was deployed during the first full year of operation of its servicers and to the commercial campaigns that it undertook for new builds, second-hand properties, homes on the coast, plots of land, etc.

Specifically, Sareb’s revenues from these campaigns grew by 85% to reach €220 million. Meanwhile, the number of homes put up for rent increased by 20% to 4,558 units.

Taking stock after four years

Since Sareb was launched in 2013, it has: recorded revenues of €16,864 million, reduced its portfolio by €10,806 million (21.3%); and repaid debt amounting to €9,856 million (19.4%).

Similarly, its cumulative losses during the first four years have amounted to €751 million.

Sources at the entity highlight the contribution that it has made to economic activity in Spain (€14,870 million), primarily by reducing debt, paying interest to entities that received public aid amounting to around €2,800 million and paying taxes amounting to €596 million.

In parallel, the entity explained that it has established a channel of collaboration with the public administrations in the area of social housing, which has allowed it to create a stock of 4,000 homes for social housing, and that 3,000 homes have been handed over already, and around 8,000 people have benefitted as a result.

Original story: RTVE

Translation: Carmel Drake