Sareb’s EBITDA Soars 23% in First Half of 2014

16/10/2014 – Expansion

In the first half of the ongoing year, Sareb’s Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) marked 23% more than a year earlier with €429 million in total, the bad bank of Spain informs itself.

In its Activity Report published yesterday, Sareb states it sold 8.100 properties during the first six months of the year, gaining from the sales nearly €1.7 billion, a double of the 2013 performance. However, the comparison shall be taken with cautiousness as in the first half of the last year Sareb was just beginning its work.

With the revenues, the bad bank could meet one of its main targets – amortization of the debt isssued for acquiring loans and real estate assets from the nine bailed-out entities and which amounted to €50.7 billion.

From January to June 2013, Sareb paid off almost €1.64 billion (€2 billion at the end of the year). For 2014, the firm set the aim at €3 billion in total.

Moreover, the bad bank paid €554 million in interests to the nine banks, meaning an average of €100 million per month.

The company chaired by Belen Romana obtained a gross margin of €601 million.

Large part of the overall revenue proceeded from financial asset management – basically collection and loans sales -, totalling at €524 million, a 34% more than in the same period of time in 2013, whereas property sales contributed with €77 million, not changing on the year-on-year basis.

Once got into its stride last year, in 2014 Sareb had to face an internal reorganization which accrued to the welcome of the new Chief Executive Officer, Jaime Echegoyen (pictured), and involved creation of three new departments: Transactions, Property and the Restructuring & Recovery one.

The last is going to manage the developer loans in hands of Sareb that represent 80% of its total balance. In the first half of 2014 only, the third department processed 5.751 applications submitted by the sector’s businessmen, of which 50% resulted in agreements on relaxing loan conditions for easier property sales.

When it comes to the Patrimony division of the bad bank, its team strives at adding value to Sareb’s REO property. For instance, it has launched a project of finishing 33 housing developments which will allow it to market 680 dwellings. Moreover, the department was responsible for promoting renting, including agreements like the one signed with Pierre & Vacances on awarding coastal hotels to the tour operator.

Finally, the Transactions office worked hard during the six months on strenghtening the retail sales channel. Pretty successfully, as in the end the bad bank managed to sell at a pace of 44 properties a day, compared to the 30 units traded daily in the entirety of 2013.

Speaking of the wholesale operations, Sareb sealed loan and rental property portfolio deals on the total of more than €100 million and it transferred one land portfolio, too.

The Activity Report also mentions the housing units the bad bank is going to award to Spanish regions as affordable homes for families in financial troubles. Sareb has already granted 600 repossessed apartments to Catalonia.

To learn more about Spain’s bad bank, visit our SAREB section.


Original article: Expansión (after EFE)

Translation: AURA REE