Ektornet manages and develops Swedbank’s repossessed properties to recover as much value as possible. The takeover phase is expected to be largely completed in 2012. Greater focus is now being placed on sales activities.
Ektornet was officially formed in 2009 and operates as an independent business area within Swedbank. It manages and develops the Group’s repossessed assets in order to recover as much value as possible and reduce costs, thereby protecting the bank’s receivables and minimising impairment losses. This is done through development and other value-creating measures. As part of the bank, Ektornet operates under different conditions than an ordinary real estate company. Its properties must be sold at latest as soon as it is possible without a loss. If a property is not sold within three years of acquisition, special authorisation must be obtained from the Swedish Financial Supervisory Authority to maintain the holding. Ektornet has a close collaboration with the bank’s FR&R teams and has an advisory role in the bank on issues involving reconstructions, among other things.
Property sales began in 2011
The focus in 2011 remained on taking over properties and starting the sales processes. During the year properties were repossessed for SEK 3 441m (2 574) and sold for SEK 571m. The book value of repossessed properties was SEK 5 712m (2 872) at year-end. Furthermore, there are shares in an apartment project in USA with a book value of SEK 60m (183) as well as a shareholding of SEK 47m (–) which has been taken over.
Income increased by 414 per cent during the year to SEK 607m. Other income includes capital gains from property sales of SEK 173m (3) and operating income of SEK 323m (99).
Expenses increased by 104 per cent during the year to SEK 550m. Included in other expenses are direct property and hotel expenses of SEK 262m (114). Total impairment losses of SEK 126m (85) were charged against the result for the year. Any surplus values are not recognised, however.
The takeover phase is expected to be largely completed in the next 12 months, with the largest share in Latvia. By 2013 it is estimated that assets valued at a total of SEK 10bn will have been taken over, about half of which in the Baltic countries. In 2012 the work will transition more to development and management of existing holdings. Greater focus will also be placed on sales activities. In properties with high vacancies, the emphasis will be on renting out the vacant space.