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SAREB receives 37 bln euros of toxic assets

Source: Reuters - Mon 31st Dec 2012
SAREB receives 37 bln euros of toxic assets

Spain's so-called "bad bank" has received €37 billion of toxic assets from four nationalised banks, starting a key part of the country's drive to clean up its financial sector.

The real estate loans and properties are the first assets to be transferred to the "bad bank," which has been set up by the government in a bid to tackle the fallout from a burst property market bubble and restore confidence in the country's banks.

The largest share of the toxic assets transferred to the asset management company, known by its Spanish acronym SAREB, comes from Bankia, which was rescued by the state in May in Spain's biggest ever bank bailout.

Bankia has transferred €22.32 billion in assets, while Catalunya Banc has transferred €6.71 billion, NCG Banco-Banco Gallego has transferred €5.71 billion and Banco de Valencia has transferred €1.96 billion, SAREB said on Monday.

SAREB said it could now start managing the assets with a view to "carrying out the sale (of them)... seeking the maximum return for its shareholders."

In return for the assets, SAREB has issued the banks senior bonds backed by the state.

The government struggled but secured private investment to get the "bad bank" going, with most of the capital coming from the country's top lenders, except for BBVA.