Higher provisions for bad loans have hit Sareb, more than doubling the net losses to €585 million in 2014.
Spain’s bad bank has been operating for two years, dealing with €50.8 billion of distressed real estate related loans and assets. For 2014, it has written down €719 million of toxic loans which are unlikely to be recovered. The bulk of these, €628 million were originally unsecured credits and the borrowers are insolvent. Spain’s central bank has required Sareb to increase and accelerate their write down.
On the brighter side, the incipient recovery of Spain’s real estate sector led to a 23 percent boost in Sareb’s revenues, to €5.1 billion in 2014.
The bulk of this income – 80 percent – comes from sales, interest and amortisation of loans on single assets; in 2014 Sareb sold 15,298 properties, 63 percent of which were residential. Commercial property accounted for 11 percent of the income. It also disposed of 500 sites.
Bulk sales to big investors have brought in €1.1 billion, most of it coming from disposals of loan portfolios.