8 May 2017 – El Economista
(…). Sareb has been led by Jaime Echegoyen for the past two years, and has fulfilled its task of stabilising the financial system in Spain. Now, it is serving as an example for the European bad bank model.
Q: How do you think Sareb has performed since its creation?
A: (…). We are satisfied with what has been achieved over the last five years. We have managed (…) to give confidence to the sector and to serve in the restructuring of the financial sector and the reactivation of the real estate sector (…). If we had started selling off assets really quickly, we would probably not still be here. Everything has been done in a logical way and we have returned approximately 20% of the debt that was materialised in bonds with Treasury backing.
Q: Based on your experience as the President of Sareb, would you create a new bad bank in the same way?
A: (…) I think we have done a really good job, albeit a little late. (…). At the time (Sareb was created), bank delinquency amounted to more than €400,000 million and we decided to resolve one quarter of that balance, which in our case amounted to €107,000 million. That is the nominal value of the assets that were transferred to Sareb, which we purchased and which we paid for using €50,700 million in bonds. (…).
Q: What is Sareb’s main business?
A: The primary focus of our business, which takes up 95% of our resources, is managing the assets for sale through the four servicers: Altamira, Haya Real Estate, Servihabitat and Solvia. (…). We started with €50,700 million and at the end of 2016, we had €40,100 million.
Q: What other new activities are you going to undertake?
A: Of the revenues generated last year (€3,900 million), €2,800 million came from loans and the rest was generated by property sales. Therefore, the activity in terms of loans is very important. The number one source of our revenues in that branch comes from the repayment and cancellation of loans, and then from interest and in third place, from loan sales, and we are now going to focus on that third activity. We are planning to create an internal platform within Sareb, access to which will be restricted, and to which we will invite professionals who know what they are buying and who are qualified to be able to choose a range of loans. We are starting development now and we hope to conduct the first trials at the end of the summer, with an initial volume of loans amounting to €10 million. Depending on how well it is received, we will add more volume.
Q: Sareb’s accounts don’t add up, there are losses. How are you going to approach the next few years?
A: The mandate that we have is to be capable of returning the money that was given to us at the time to buy those assets and to do so in an orderly manner, without having to ask for more money. Our mandate has never been to make money (…). What we do is look at the market value of the assets we have and, whenever we can, we sell them. We only hold onto some of them within our portfolio for future development when we consider that that is the best course of action for the shareholders. Currently, we have own funds amounting to €4,000 million and we have to make those last until 2027.
Original story: El Economista (by Luzmelia Torres)
Translation: Carmel Drake