Spanish savings banks create a joint company to sell repossessed houses and flats at reduced prices
Ahorro Corporación Soluciones Inmobiliarias (ASCI) is the name of the company created by a group of savings banks in order to try and solve the problem of what to do with the increasing number of houses and flats being repossessed by people unable to meet their mortgage payments or by building promotors unable to pay loans taken out to finance building.
Just over half of all Spanish savings banks have decided to participate in the initiative which does not include Spain’s two largest savings banks, La Caixa and Caja Madrid. The company’s assets have been valued at more than 3000 million euros. These assets consist mostly of new flats and houses which are in the process of being built together with land. The idea behind the creation of ASCI is to reduce the risks that the banks have to take when managing these assets.
The Chairman of company has told the Spanish media that the ASCI did not constitute ‘a bad bank with toxic assets’ although the property assets that the savings banks have transferred to the company have now disappeared from their balances as such and have been automatically converted into shares.
ASCI will become the largest association for selling and renting property in Spain due to its access to the network of over 17,000 branches belonging to its members. The company announced yesterday that discounts of around 25% would be applied to already completed properties.