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SAREB submits revised business plan

Source: Reuters - Thu 21st Mar 2013
SAREB submits revised business plan

Spain's bad bank SAREB announced a slightly lower-than-expected return on equity in a new business plan approved on Wednesday for the entity's 15-year lifespan.

SAREB, the asset management company created by the government at the end of last year to house soured property assets, said it would offer a return on equity of between 13 - 14% versus initial expectations for a return of 14 or 15%.

The bank is still trying to complete its capital and shareholder structure but said in a statement that the approval of the business plan was a key step in allowing it to start managing its assets, worth about 50.4 billion.

The majority of the real estate assets come from nationalised lenders such as Bankia, Catalunya Banc, NCG and Banco de Valencia, all of which have suffered from a burst property bubble and prolonged economic recession.

SAREB said it plans to sell almost 50% of the buildings and homes within the first 5 years of operation.

The bank, launched to comply with the terms of a 40-billion European rescue of Spanish banks, said it expected to generate 75% of its revenues through property sales and the remaining quarter by selling loans.

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