Nationalised banking and insurance group SNS Reeal has transferred the shares in its property finance division to the Dutch state as part of the process of establishing a bad bank.
Nationalised banking and insurance group SNS Reeal has transferred the shares in its property finance division to the Dutch state as part of the process of establishing a bad bank.
The transfer took place on 30 December. The state will subsequently transfer these shares to NL Financial Investments (NL Financial Investments). The bad bank new organisation will operate under the name 'Propertize', a term created to reflect the organisation's mission to 'maximize and monetize property assets'.
Propertize will function as an independent organisation mandated to run down its €4.8bn loan portfolio over an 8-10 year term.
'With the right people and an efficient organisation, we will fulfil our special mission', said CEO of Propertize Hans Copier. 'We will build value as we reduce the portfolio. Main goal is optimisation value: the highest possible return with the lowest possible risk. At present, nearly 200 people are employed at Propertize. The number of employees will gradually decline in parallel with the decrease in the size of the portfolio.'
SNS Reaal was nationalised on 1 February 2013 after running into financial problems caused by its property finance business. In total, the bailout of the bank cost the Dutch taxpayer €4.8 bn. Finance minister Jeroen Dijsselbloem announced at the time that the real estate and real estate loan portfolio would be separated.
The spin-off of the property finance activities is part of the restructuring plan for SNS Reaal, which the Dutch government submitted to the European Commission (EC) on 19 August 2013. The EC approved the transfer on 19 December 2013. As of 30 December 2013, the Dutch state will guarantee the funding by SNS Bank of the property finance business.
