News & Analysis

Sareb writes off €719m of bad loans

Higher provisions for bad loans have hit Sareb, more than doubling the net losses to €585m in 2014. Spain's bad bank has been operating for two years, dealing with €50.8bn of distressed real estate related loans and assets. For 2014, it has written down €719m of toxic loans which are unlikely to be recovered. The bulk of these, €628m were originally unsecured credits and the borrowers are insolvent. Spain's central bank has required Sareb to increase and accellerate their write down.

-

SarebHigher provisions for bad loans have hit Sareb, more than doubling the net losses to €585m in 2014.

Spain’s bad bank has been operating for two years, dealing with €50.8bn of distressed real estate related loans and assets. For 2014, it has written down €719m of toxic loans which are unlikely to be recovered.  The bulk of these, €628m were originally unsecured credits and the borrowers are insolvent.  Spain’s central bank has required Sareb to increase and accellerate their write down.

On the brighter side, the incipient recovery of Spain’s real estate sector led to a 23% boost in Sareb’s revenues, to €5.1bn in 2014.

The bulk of this income – 80% – comes from sales, interest and amortisation of loans on single assets; in 2014 Sareb sold 15,298 properties, 63% of which were residential.   Commercial property accounted for 11% of the income. It also disposed of 500 sites.

sareb loan sales 2014Bulk sales to big  investors have brought in €1.1bn, most of it coming from disposals of loan portfolios.