Spanish bank bailout fund FROB exceeds 50% stake in bad bank Sareb

MADRID (Reuters) – Spain’s state-owned bailout fund FROB has increased its stake in the country’s “bad bank” Sareb to more than 50%, in line with a European Union order to count its liabilities as public debt.

The FROB announced on Tuesday that it had bought a 4.24% stake in Sareb, created in 2012 to take over bad debts after the financial crisis, to increase its stake to 50.14%. No price was given, but multiple sources familiar with the matter said it was only nominal.

The move comes after the government in January approved a legal framework allowing the FROB to exceed the 50% threshold in Sareb following the EU order.

FROB did not say which banks had sold their stakes, but a Sareb source said some smaller holders, such as Bankinter, had contributed their stakes. Bankinter declined to comment.

Santander remains the leading private shareholder with a 22.2% stake, followed by Caixabank with 12.2%.

Several Spanish banks are considering selling their stakes in Sareb, which has struggled since its inception as falling property prices have driven down the value of loans and assets, but most had kept their stakes for tax reasons.

After selling 17.1 billion euros of all debt issued, Sareb still holds 33.7 billion euros of senior debt.

(Reporting by Jesús Aguado; Editing by David Holmes)

Edward K. Thompson