Sareb’s Losses Plummeted by 55% in 2018 to -€878M

28 March 2019 – Cinco Días

Sareb recorded losses of €878 million in 2018, which were 55% greater than those registered in the previous year. Moreover, the bad bank forecasts a similar result for this year.

Despite the disappointing results, Sareb ended 2018 with own funds of €2.6 billion, which represents a sufficient volume to not have to request any capital increase from its shareholders, which include most of Spain’s major banks and the FROB.

The President of the bad bank, Jaime Echegoyen, observed that his company is committed to the divestment of the problem assets that it acquired from the struggling banks during the crisis, and to maximise its returns. Sareb is competing against many of the banks, which are now selling large portfolios of real estate assets at significant discounts. Nevertheless, it is reluctant to match those discounts given that its cost of managing the assets is lower than the discounts being asked for.

Instead, Sareb has opted to transform the assets it owns by finishing suspended developments and building new homes on the land that it owns. Within the coming days, the company is expected to close an agreement with a property developer, which will build new assets on some of its land.

At the end of 2018, the bad bank recorded total revenues of €3.65 billion, down by 5% YoY. It sold 21,152 units during the year, up by 12% YoY. But, it continued to incur significant expenses – its financial costs alone amounted to €658 million, whilst its operating expenses amounted to €697 million, resulting in the aforementioned losses.

Since its creation in 2012, Sareb has now reduced its global portfolio by one third (€16.5 billion) and repaid 30% of the debt that it issued to pay for the assets in the first place (€15 billion).

Original story: Cinco Días (by Ángeles Gonzalo Alconada)

Translation/Summary: Carmel Drake

CaixaBank Sells The ‘Torre Norte’ To SegurCaixa

15 April 2015 – Expansión

Barcelona / SegurCaixa has acquired the ‘Torre Norte’, valued at €14.5 million, as part of the strategic alliance between the bank and the insurance company.

SegurCaixa Adeslas, owned by CaixaBank and controlled by Mutua Madrileña, has purchased the Torre Norte (one of the three Nissan Towers in Barcelona) from CaixaBank. The transaction was valued at €14.5 million.

The sale forms part of the insurance sector alliance between Mutua and CaixaBank. The agreement made resulted in the segregation of the business between VidaCaixa, a fully owned subsidiary of CaixaBank, and SegurCaixa Adeslas. The latter was granted the option to buy the building, which it has (now) decided to exercise.

Following this transaction, the employees of SegurCaixa will occupy the Torre Norte and those of VidaCaixa will be housed in the Torre Sur. Microbank, another subsidiary of CaixaBank will occupy the top floor of the Torre Centro.

Mutua Madrileña hereby adds another building to its growing list of properties, worth €1.2 billion, which generated unrealised gains of €357 million last year.

The flagship building of the company, chaired by Ignacio Garralda, is the Torre de Cristal in Madrid, which has an appraisal value of €504 million, and therefore accounted for 41% of the insurance company’s total property portfolio at the end of 2014. The unrealised gain on that property amounted to €59 million. Then, the building located on Paseo de la Castellana, 33 in Madrid, where Mutua has its headquarters, is the second largest in the company’s portfolio by value. It has an appraisal value of €115 million, compared with a book value of €69.8 million.

The third building in the ranking is the Alfredo Mahou property in Madrid, which has a market value of €104 million and a book value of €29 million, i.e. has unrealised gains of €75 million.

Investment plan

Last year, Mutua Madrileña completed the investment plan it launched in 2008, which sought to modernise its properties to “convert them into flagship properties in the market. Through this, we created the distinctive Mutua Building”, explains the company in its annual accounts for 2014. The company also sought to reduce operating expenses (through this plan) to increase the appeal (of its properties) to clients.

The leased buildings generated revenues of €32.8 million for Mutua in 2014 and the company made investments amounting to €13.6 million during the year. Its occupancy rate last year was 90%, up from 88% in 2013.

Real estate investments accounted for 20% of the company’s total investments during the year, which had a market value of €6,654 million.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake