Reuters logo
4 months ago
UPDATE 1-Spain's bad bank reports loss for fourth year in a row
March 30, 2017 / 3:05 PM / 4 months ago

UPDATE 1-Spain's bad bank reports loss for fourth year in a row

2 Min Read

* Losses total 663 mln euros for 2016

* Sareb chairman does not expect profits in future

* Sareb initially predicted a profit in its second year (Adds quote from chairman and details)

By Jesús Aguado

MADRID, March 30 (Reuters) - Spain's "bad bank" Sareb, created to clean up the country's finance sector, reported its fourth consecutive annual loss on Thursday, due to a squeeze on margins and rising costs.

Sareb, set up in 2012 to take on around 50 billion euros ($53.68 billion) in land, buildings and loans from bailed-out banks, made a 663 million euro loss for 2016. It restated its loss for 2015 to 103 million euros due to accounting changes.

Chairman Jaime Echegoyen said that with current financial and operating costs of 1.2 billion euros it did "not seem reasonable" to expect Sareb to turn a profit in the foreseeable future. Sareb had initially predicted it would make a profit in its second year of operation.

Sareb has a mandate to sell the assets it holds in the 15 years from when it was established.

Sareb's gross margin - the difference between losses and gains it made on sales of assets - fell 46 percent to 664 million euros.

The bank managed to increase its total revenues by 1 percent to 3.9 billion euros in 2016 against a backdrop of a slight recovery in the Spanish real estate market.

The bad bank, jointly owned by the government and Spain's banks, has had to book provisions against its results to reflect changes in the value of the assets it holds which has eaten into its capital reserves.

But in December, the Spanish government passed a law with more favourable accounting terms which allowed Sareb to boost its capital to 4 billion euros from 1.7 billion euros in 2015. ($1 = 0.9315 euros) (Editing by Angus Berwick and Jane Merriman)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below