Bad Spanish Bank: SAREB
El Mundo has:
The idea behind the bank is that distressed loans can be handed off to this bank after a haircut. It is expected to yield 15% on equity, due to severe haircuts.
We are talking an average rebate of 63%. Building land 79.5%, buildings under construction 62.3%, finished buildings 54.2% and loans to developers 45.6%
That is paying 20 to 50 cents on the dollar for these loans.
This bank should live for 15 years maximum.
Bankia, Catalunya Banc, Novagalicia Banco y Banco de Valencia – al banks in FROB (the public dustbin bank) – will transfer 45 bio. EUR worth of “bricks”. After that banks that have received public aid should transfer other 15 bio. EUR. Estimated potential volume is 90 bio. EUR.( And NO I don’t know if it is before or after impairment.)
The idea is neither new nor bad!
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