• Sareb Between the brick drain and the rent problems

The 2012 bank bailout continues to take its toll on taxpayers nearly a decade later.

Specifically, a bill of

35,000 million euros

that the State will have to assume once the debt that the Company for the Management of Assets from Bank Restructuring (

Sareb

) maintains is counted as public debt.

This is established by Eurostat, which now forces to

reclassify the so-called

bad bank

in which a large part of the toxic assets of the entities rescued in 2012 were grouped with the aim of selling them and making them profitable at a better price to pay precisely this rescue.

With this decision, the 35,000 million euros of debt that Sareb maintains will be considered public debt and will be added to the rest of the Treasury debt as of 2020. The impact of the measure will also extend to

the State

deficit

in a percentage still to be specified but which will be equivalent to the negative equity that Sareb has at the end of 2020.

In 2019, Sareb's negative net worth exceeded

7,000 million euros

, to which should be added the losses recorded last year.

That makes it possible to advance that the impact on the deficit "will be well above" that amount, they point out from the Government, although the final amount will be known after the approval of the bad bank accounts scheduled for next week.

The 2020

debt / GDP ratio

will also be altered.

Public debt amounted to 117.1% of GDP in 2020 and when adding the impact of 35,000 million from Sareb, it will climb to 120%, above the initial forecast of 118.8 % of the government.

"Gradual" decision

Sareb was born in 2012 with the aim of draining through it all the toxic elements from the balance sheets of the savings banks and banks that were then at risk of bankruptcy in Spain.

The entity was set up with 55% private capital - made up of other banks - while the remaining 45% remained in the hands of the State, precisely to prevent the debt from being computed in public accounts.

At that time, both the Government of

Mariano Rajoy

and the Bank of Spain calculated that this vehicle could yield a profitability of 15%, however, the passage of time has left those forecasts on paper and at the end of 2019 its negative net worth exceeded 7,000 million euros.

The reclassification of Sareb is a

"gradual" decision

that has been negotiated with Eurostat since 2018 as a result of the regulatory changes that govern the accounting of this type of companies at the European level.

But not only that.

The accumulation of losses in this period has ended up consuming all the initial capital and has also been definitive because one of the conditions in its origin was that the company did not register significant losses.

In addition, according to sources close to the negotiation, there are other factors that have weighed on the evolution and results of

the bad bank

, such as, for example, that originally

the difficulties involved in the instrument

, the increase in prices,

were "underestimated".

of transfer in these years and other decisions that now, seen in perspectives, seem less successful, such as the contracting of derivative insurance or

the role of the

servicers

at this time.

Beyond 2027

The reclassification will not have any other impact on the organization or operation of Sareb, as well as on the management of its real estate portfolio.

The objective continues to be to obtain resources to pay off the debt, so that as Sareb's asset portfolios are sold, that part of the State's debt will also be reduced.

The other question on the table has to do with the life span of Sareb itself.

Initially it was proposed with an expiration date, the year 2027, but now it is not ruled out that this horizon goes further and the sources consulted assure that it would be "logical" to consider at least this option.

According to the criteria of The Trust Project

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