Spanish savings

Around half of Spain's savings banks are joining together to create an 'estate agent' to sell defaulted property and developments worth £2.7 billion...

A new company, Ahorro Corporación Soluciones Inmobiliarias (ASCI), will be managed by Ahorro Corporación, a financial services firm jointly owned by the savings banks.

It aims to become the biggest estate agents in Spain using 17,000 local bank branches offering property for sale and to rent.

It is hoped that it will help to offload a huge number of properties that are now owned by the banks and discounts of up to 25 per cent are expected.

So far 23 of Spain's 42 savings banks have joined. Caja Madrid and La Caixa, Spain's two largest savings banks, are not yet part of the scheme but they are looking at the situation closely.

The new company will sell all types of property including land, developments under construction, commercial real estate, industrial property, hotels, and homes. The company claims that it already has stock for sale valued at £2.7 billion.

Residential properties will be offered for sale at discounts of up to 25 per cent, and the banks also have the option of offering finance to buyers. Most of the residential stock so far is reported to be made up primary residences, but holiday homes on the Coast will also be on offer.

The move will also allow the banks to wipe impaired property assets off their balance sheets. However, if discounts are to be offered the process could also involve write downs, which could reduce their capital.

Some newspaper reports in Spain claimed it was the creation of a 'bad bank' dealing in toxic assets but this was denied by Antonio Fernández, Head of Ahorro Corporación.

Source: www.propertywire.com