Asset Management Company from Bank Restructuringknown as Sarebwas the formula chosen by the government of Mariano Rajoy, with Luis de Guindos at the head of the Ministry of Economy, to save the Spanish financial system after the burst of the real estate bubble. This company, which was established in 2012 and popularly referred to as a ‘bad bank’, was not a Spanish idea and was also implemented in countries such as Ireland.
With We only have 15 years of life ahead of usThe Regular Banking Restructuring Fund (Frob) withdrew all loans linked to the ‘brick’ backer from the former savings banks, transferring them to a mixed company between the public and private sectors. The valuation given at that time to all loans and properties included in Sareb was around 50,000 million. Different sources assure that there is overvaluation in terms of how much the assets are actually worth.
HE new Administrator Pedro Sánchez will be the one to do it deciding what the future of the entity will be The majority has been in Frob’s control since 2022, as a result of Eurostat forcing the Ministry of Economy to count the company’s debt as public debt. The decision on Sareb’s future will be a Spanish decision, and despite the current pressures, this decision will not come from the European Union, the famous “troika” or the “men in black” who continue to periodically monitor the situation. The company is public-private.
Liquidation is the first and least viable option
The first option on the table for Sareb will be liquidation through liquidation. This means: sell all assets hastily and of course at an affordable price that the being is in its own power. This includes a portfolio of tangible assets such as constructed buildings and land, as well as outstanding loans pending enforcement for the real estate asset they own as collateral.
Although this option would carry a negative reputational burden, Less applicable due to the gap it will create in government accounts. Sareb has a debt of around 30 billion guaranteed by public accounts. In the event of a hypothetical liquidation, if the cash remaining in the company is not enough to face it in its entirety, Spain will be the one to face it. Therefore, if assets are sold at an excessive discount, the bill to be paid will be even higher.
Extend deadline, easy and feasible option
The decision on what will happen in 2027 must be made at least two years in advance by Frob and therefore the Ministry of Economy. The simple solution on the table will be to change the disbandment date. Thus, the period for Sareb and his partners to continue their activities will be extended. Industrial duties such as honoring guarantees on outstanding loans and proceeding with the sale of assetssomething that takes up about 85% of activity today.
Which means it will be Nadia Calvinoor if he becomes president of the European Investment Bank (EIB), whoever makes the decision will be his successor in office. No one knows what will happen and this does not appear to be a major concern for the incoming Executive, who will yet have time to press on. Extending the deadline would be a step forward and this will undoubtedly Greater scope to maximize returns on assetsunless a down cycle develops in the sector that will cause values to fall again.
Distribute across communities and municipal councils
The third option would be to distribute the remaining assets in Sareb among different managements. A priori, It would make sense for the land to end up in the hands of the state land agency Sepes.It is a publicly traded company affiliated with the Ministry of Housing and Urban Agenda. On the other hand, houses cannot be transferred to this company; It does not manage residential properties, as powers rest with communities and municipal councils.
One possibility local and regional government these beings, but it is possible I dont want themAs in previous agreements. The agreements were a program supported by Sareb, in which houses were transferred to administrations for the allocation of social rents, for which he received small financial compensation. This program did not work, as the stated goal was never achieved: 2,000 of the proposed 15,000 properties are available. Another option that might make sense is for entity will create a ‘spin off’ (a separate subsidiary of the parent company), Bringing all social housing together and becoming a public operator in communities that do not want to take over property.