• Sareb The State will have to assume the Sareb bill and will shoot the public debt to 120% of GDP

The pandemic has taken its toll on

Sareb

, although not more than it expected.

The Company for the Management of Assets from Bank Restructuring recorded

losses of 1,073 million euros

in 2020

, 13.3% more than the 947 million a year ago, as the company reported this Wednesday.

The company, also popularly known as

a bad bank

since it was created to assume the toxic assets of the 2012 bank rescue, has ensured that the losses are in line with the forecasts it made before the pandemic and take place in a year of economic slowdown in which its sales strategy has been marked by prudence to avoid the significant discounts demanded by the market.

This context has had a negative influence on practically all its parameters.

Revenues were reduced by 38%

, to 1,422 million euros, of which 567 million came from the business of managing

unpaid loans

(40% less due to the contraction of this market), while 848 million corresponded to the

management and sale of real estate

, which represents a decline of 36% compared to the same period of the previous year.

Sales in the residential sector reached a volume of 641 million, compared to 1,043 million in 2019, and practically all occurred in the private market, "in which a higher rate was also observed during the second half of the year."

The slowdown in sales was longer in the case of land and tertiary assets, which generated revenues of 160 million euros, 35% less.

Throughout the year, the company

sold 12,111 properties, 28.5% less than in 2019

.

Of these, 10,359 were owned units and 1,752 were assets that were listed as collateral for developer loans.

At the end of 2020, Sareb's assets accumulated total book losses of more than 9,100 million euros and the gross margin of its business plummeted 65%, to 160 million euros.

Debt

Regarding debt, the company canceled 179.8 million euros of senior debt in 2020, and this allows it to increase the volume of canceled debt to 31.2% of everything issued at the time of its incorporation, up to a total of 15,863 million euros.

For the president of Sareb,

Jaime Echegoyen

, "our objective is to continue working day by day to minimize the impact of the debt on public accounts, without neglecting our divestment mandate or collaboration with the administrations in matters of social housing."

The reduction of the debt was one of the objectives since its constitution and it is maintained now, despite the fact that Brussels has forced the Spanish State to assume that debt as public and to compute it in the balance of 2020. This was announced a few days ago by the head of the Public Treasury,

Carlos San Basilio

, which raises the public debt by 35,000 million and triggers the deficit to almost 11% (10.97%).

In its eight years of activity, the company

has reduced its portfolio by 37.3%,

to 31,800 million euros.

The approval of the annual accounts and the 2020 Management Report will be voted on at the General Shareholders' Meeting to be held in May, in which the conversion of 1,430 million euros of subordinated debt into equity will also be proposed predictably.

"It has been a complicated year, in which we have focused on preserving the value of assets by moderating the aspiration of income so as not to assume the discounts that the market would have requested, especially in land sales and unpaid loans. We have taken advantage of 2020 to win in cost efficiency and improve our retail sales capacity, at a time of great economic uncertainty, "said Sareb CEO

Javier García del Río.

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