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Government action means Sareb avoids having to increase capital

Sareb (a management company for assets from bank restructuring) will avoid having to expand their capital once more thanks to a recent accounting change approved by the government.

The government have changed the rule that the latent losses detected during the continuous inventory of the portfolio no longer impact on results and can be addressed against property. Thus, Sareb will add to their 950 million in capital and the 1,400 million of subordinate debt, 2,300 million which it will recover from previous accounting provisions and which now can be counted as their own resources.

The company, of which Jaime Echegoyen is president, will have, therefore, almost 5,000 million euros of resources with which, only at the end of the term, it should be able to address the losses generated.

This change of rules does not imply that Sareb will show a profit. The firm has important financial spending and operational responsibilities including hundreds of millions in IBI and IVA.

 

 

 

 

 

 

 

Photo: El Mundo