Spanish ‘bad bank’ lowered its loss to $1.6 bln in 2022

MADRID, March 30 (Reuters) – Spain’s Sareb said on Thursday its losses dropped by 7.4% to 1.5 billion euros ($1.6 billion) in 2022 compared to a year earlier thanks to higher revenues from asset sales.

The so-called bad bank, set up to take on bad loans from the financial crisis which enveloped Spain in 2012, has been struggling since its creation as a slump in real estate prices depressed the value of the loans and assets it holds.

But Sareb, which has a mandate to sell the assets it holds in the 15 years from when it was set up, said on Thursday it had increased its total revenues by 8% to 2.36 billion euros in 2022 thanks to retail sales and some big corporate transactions.

In the face of a higher rates environment, Spain’s bad bank is focused on accelerating its assets sales and reducing debt.

Sareb did not disclose the costs of servicing its senior debt portfolio, which totals more than 30.48 billion euros. Last year, it cancelled a record 3.2 billion euros of that debt, which has shrunk by 40% since 2012.

A source told Reuters that the bank was expected to face a bill of around 300 million euros in higher costs from rising interest rates to service its senior debt in 2022.

This would have an impact on state coffers as the government owns more than 50% of Sareb through its FROB bailout fund.

Sareb said it had cut its total asset portfolio in 2022 by 8.4% to 26.47 billion euros compared to 2021.

($1 = 0.9193 euros)

Our Standards: The Thomson Reuters Trust Principles.

Read More