Nationalised Banks to Transfer 36,085 Million Euros of Assets to ‘Bad Bank’

In a transaction set to take place on 31st December, Spain’s nationalised banks – Bankia, Novagalicia Banco, Catalunya Banc and Banco de Valencia – are to transfer to the asset management company for bank restructuring (Sareb) assets with a total value of 36,085 million euros.

As the four entities have communicated to the National Securities Market Commission (CNMV), the transmission of these assets and loans linked to the ‘brick’ will be in exchange for bonds issued by the Sareb and which will have the guarantee of the Spanish state.

Specifically, Bankia will transfer assets worth 22,318 million euros, 2,850 million euros of which will come from its parent company BFA. Catalunya Banc is to transfer 6,708 million euros of assets, Novagalicia Banco 5,097 million euros and Banco de Valencia 1,962 million euros.

According to Diario Sur, the agreement for the asset transfer to the Sareb signed by the nationalised banks anticipates that before the end of the current year the company will sign contracts agreeing the terms of the subscription and payment of these fixed income securities.

The Ministry of Economy expects Sareb to bring together around 55,000 million euros of assets after the handover process of the entities which form Group 2 is completed in February, and which will require a further capital increase and the issuance of new subordinated debt.