Spain's bad bank to receive more soured property assets
By Peter Mindenhall

Spain's bad bank to receive more soured property assets

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Spain's 'bad bank' Sareb is poised to receive €14 billion (approximately just over £12 billion) of soured property assets from a collection of mid-sized banks in the country. The government-backed organisation is set to use the investment to continue to clean up Spain's banking system following the nation's property crash five years ago.

The country's government launched Sareb towards the end of 2012 as part of a €40 billion (£34.5 billion) strategy to rescue the nation's ailing lenders. Since its introduction, the bad bank has taken on tens of thousands of troubled loans relating to developers, plots of land and buildings. These transactions have been found to be at various stages of development.

In a bid to provide a further boost to the Spanish property market, the organisation is now set to receive €2.2 billion (£1.89 billion) worth of assets from Caja 3, which is set to be taken over by Ibercaja, on top of €3.1 billion (£2.67 billion) of assets from savings bank group CEISS.

Meanwhile, BMN will transfer loans and properties totalling €5.8 billion (£5 billion) to Sareb, as the bank prepares to be majority-owned by the state, and finally Liberbank is prepared to transfer €2.9 billion (£2.5 billion) of bad real estate assets to Spain's bad bank.

All of the transactions are set to be complete by the end of the day (February 28th) and should result in Sareb's assets increase to between €50 and €55 billion (a range of approximately £43.1 to £47.5 billion).

The bad bank has proven useful in Spain since its integration late last year, with just over half of the organisation's capital now in the hands of private investors. These are mainly made up of healthier banks in the country that have not transferred their assets to Sareb, thus easing the burden on the nation's public finances.
 
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