Private investors hold 55 percent of bad bank

The asset management corporation (Sareb) set up by the government to absorb the toxic assets of the country’s banks has completed its initial shareholder structure with the entry of another 14 financial institutions, that include almost all of the Spanish banks with the exception of BBVA, Economy Minister Luis de Guindos told Congress on Tuesday.

“On November 28 the real estate company Sareb was established as a limited company and last Thursday December 13 the first capital increase gave entry to the main private partners, Santander, CaixaBank, Popular, Sabadell and Kutxabank,” De Guindos said. “There was a second capital increase on Monday to give entry to national and foreign banks and a group of private insurance companies,” he added.

The 14 include two foreign lenders, Deutsche Bank and Barclays Bank, and eight Spanish banks: Ibercaja, Bankinter, Unicaja, Cajamar, Caja Laboral, Banca March, Cecabank and Banco Cooperativo Español. The four insurers also included are Mapfre, Mutua Madrileña, Catalan Occidente and France’s Axa.

As a result, private shareholders own 55 percent of Sareb’s capital and the state through the Orderly Bank Restructuring Fund the remaining 45 percent.

De Guindos said over the next few days Sareb will have the available funds to absorb some 40 billion euros in toxic assets from the four banks that have been nationalized: Bankia, Catalunya Banc, NCG Banco and Banco de Valencia.

The FROB said Monday that NCG Banco had a net negative worth of 3.091 billion euros, while Catalunya Banc’s net negative worth was 6.674 billion euros and that of Banco de Valencia 6.340 billion. The latter is to be absorbed by CaixaBank.

De Guindos said that after the nationalized banks, in February of next year Sareb will absorb the toxic assets of banks that have not been nationalized but require an injection of capital by the state. These include BMN, Banco CEISS, Liberbank and Caja 3. This will require a further capital hike by Sareb and the issue of new subordinated debt.

The minister said these lenders will require an injection of between 1.5 and two billion euros. This might result in the state becoming the majority shareholders in two out of the four, one of which would be BMN, depending on the final valuations of the banks in question.

Santander invested an initial 164 million euros in Sareb, Caixabank 118 million, Banco Sabadell 66 million, Banco Popular 57 million and Kutxabank 25 million. The FROB injected a further 397 million euros.

These banks, along with other private investors, will over the next few weeks subscribe to a subordinated debt issue by Sareb to increase its initial capital to 3.8 billion euros.