23 of Spain’s 42 savings banks, known locally as cajas, have joined together to create a type of ‘outlet’ sales channel to help them sell their impaired property assets. The company, called Ahorro Corporación Soluciones Inmobiliarias (ASCI), will be managed by Ahorro Corporación, a financial services company jointly owned by Spain’s cajas.
The new company aims to become the biggest property sales channel in Spain, using the cajas’ combined total of more than 17,000 branch offices around Spain to offer property for sale and rent.
The cajas that participate will be able to sell any type of property through the company, 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 3 billion Euros.
Residential properties will be offered for sale at discounts of up to 25%, and the cajas 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.
So far Caja Madrid and La Caixa, Spain’s 2 biggest savings banks, have not signed up to the new initiative, though they may do so in future.
Along with gaining access to a new ‘discount’ sales channel, the new company will also enable participating cajas to get 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.
“This is not about toxic assets, nor about creating a ‘bad bank’,” Antonio Fernández, head of Ahorro Corporación told the Spanish press. That didn’t stop some reporting that the new company will be a ‘caja basura’, or toxic savings bank.