Spanish PM Mariano Rajoy allegedly received €25,000 in kickbacks per year for more than a decade and so did many others: can the Partido Popular be held partly responsible for the Real Estate bubble in Spain?

The Partido Popular, the conservative party of Spain, has become under heavy fire due to recent accusations of corruption and bribery. While the attention focused initially on other members of the PP, since 31 January the spotlight is firmly aimed at Prime Minister Mariano Rajoy himself. He is accused of receiving more than €25,000 in kickbacks per year for the full period between 1997 and 2008.

The generous donors have supposedly been large building companies, who made their fortune during the emerging of the Spanish real estate bubble. The involvement of Rajoy in this year-long corruption case has been discovered by the Spanish newspaper El País. However, for purposes of convenience I start with some quotes from the Financial Times:

Rajoy drawn into corruption scandal

Spain’s prime minister has become embroiled in a growing scandal over secret cash payments to ruling party politicians after a newspaper published what it claimed to be accounts showing payments reaching as high as Mariano Rajoy himself.

The Popular party on Thursday again firmly denied that its leaders, including Mr Rajoy, received improper cash payments funded from donations from construction companies, as flames from the corruption allegations licked at the feet of some of its most senior figures.

The PP insisted that no party leader received payments outside their regular salaries after El País, Spain’s biggest selling daily, claimed that the prime minister had received €25,200 each year since 1997 in payments made every three or six months, reproducing on its front page what it claimed to be pictures of the former PP treasurer’s accounting book.

Maria Dolores de Cospedal, the PP’s general secretary, said that the accounts published in photograph form were fake. She denied any member had been paid outside their normal salaries, and insisted no form of secret accounting had taken place.

After Pío García Escudero, the PP president of Spain’s Senate, confirmed that a loan referencing his name in the alleged accounts was genuine, Ms Cospedal said this did not in any way confirm the veracity of the other entries in the accounts, which showed herself receiving several payments in 2008.

While the Financial Times only states that payments have been made by Spanish construction companies, El País supplies some more details on this shocking corruption case. 

The snips mentioned here have been translated from Spanish by me:

The secret accounts of Luis Bárcenas

The accounts held by Luis Bárcenas had nothing to do with official state subsidies for the Partido Popular, as part of the public financing for Spanish political parties. To the contrary, all payments have been recognized as private donations from well-known companies and entrepreneurs, especially from the construction industry.

From  those payments, according to these accounts, €120,000 have been donated in 2004 by Luis de Rivero, who was at the time vice-president of Sacyr Vallehermoso. In 2006, he donated another €240,000 when he was already president of this construction company. 

Other payments have allegedly been made by Juan Miguel Villar Mir, president of OHL: respectively €100,000, €180,000 and €200,000 in 2004, 2006 and 2008. 

José Mayor Oreja, president of FCC Construction and brother of the former Minister of Domestic affairs, has made two payments of €90.000 and €75.000 in 2008. A person or company, nicknamed “Mercadona” (i.e. ‘market’) donated €90,000 and €150,000 in 2004 and 2008. All persons mentioned here, however, denied directly or through their spokesmen to have donated these amounts.

The article in El País is a must-read for people who are interested in this matter and master Spanish. The amounts that have been paid might not seem too spectacular, but according to another article in El País, the total amount of briberies over the years has been €40 million: a very substantial amount, especially for a political party.

Besides that, we should look at those payments in the light of A. the fact that the Partido Popular has claimed that the Spaniards have been “living beyond their means” and B. the desperate economic situation in Spain.

According to Lex Rietman, the Dutch correspondent for BNR business radio (www.bnr.nl) in Spain, the claim that the Spaniards have been living beyond their means is ridiculous: the average Spaniard doesn’t earn more than €1000 per month.

And concerning the economic situation of Spain: the country, ‘prominent’ member of the PIIGS countries, has currently more than 26% of unemployed workers and more than 55% (!) of unemployed youngsters, according to the latest unemployment data by Eurostat. The economic situation in the country is yet somewhere between ‘hopeless’ and ‘extremely difficult’. 

The country is still in the middle of a very difficult transition from an agricultural and tourism-oriented country towards a modern services and industry-oriented country and this process would take at least another 20 years in prosperous economic times. In these desperate times, next to Seat and Zara, the only viable export product from Spain seem to be the Spaniards themselves. These are leaving Spain in large numbers to find jobs elsewhere in Europe.

On top of that, since more than a decade the country has suffered from a real estate bubble of epic proportions, that brought the Spanish economy and the banking industry almost to its knees. It seems that the Partido Popular has received briberies from the construction industry, exactly during the period in which this real estate bubble has emerged. These events make this party at least partially responsible for the Spanish real estate bubble.

Like other liberal-conservative parties all over Europe, the Partido Popular has little compassion with the unemployed and other people in need of welfare in Spain. Parties like these often use big words for these ‘spongers on society’.  In general, these parties think that the unemployed people would earlier find a job, when the unemployment benefits and welfare amounts would be diminished to the bare minimum.

However, when parties like Partido Popular (and prominent members of the VVD in The Netherlands) have been involved in widespread corruption, they should meet as little compassion as they show to people-in-need themselves. Receiving briberies for a large number of years is already a disgrace, but lying about it and washing your hands of innocence is even worse.

If the facts in El País and other newspapers can be proved beyond reasonable doubt and I have not much doubt that they can, than Mariano Rajoy has one way to go: to the exit! In this case, the Partido Popular and its donors should go through an extensive cleansing process, in which all perpetrators of this bribery affair should be fired and prosecuted.

It seems that the Spanish opposition and the many protestors in the streets of Madrid came to the same conclusion!

Modern leaders: knights of the divine self-righteousness!

Everybody probably knows the rules-with-a-wink that some managers of companies have on a piece of paper in their office:

Rule 1 – I am always right

Rule 2 – When by chance I am wrong, then rule 1 automatically applies

Fortunately, most people have enough self-reflection and sense of humour to admit that they are just a drop of water in an endless sea. They do their best and try hard, but the lists of successes and failures is nicely balanced out.

The search for perfection and divinity in ourselves is often frustrated by laziness, disorder, lack of concentration, ignorance and other ‘bad’ habits: these habits are what makes us human after all.

On top of that, most humans are surrounded by people that either love them and respect them or dislike and criticise them. Both categories are very well able to keep people firmly with their feet on the ground.

However, there is a category of people that is often not so much connected with the earth anymore. These are the so-called leaders. It doesn’t matter much whether those leaders are:

• leading scientists and pundits; 
• CEO’s of small companies or multinationals; 
• Religious leaders on a local, national or global level; 
• Political leaders on a regional, national or global level. 

Very often, you notice that similar patterns are emerging in those persons:

• When they acquire their position, they build up a circle of trusted persons around them, while shutting out ‘strangers’, people that have very different opinions or a different personality and/or people that they don’t like or trust;
  
• Their office, headquarters or palace starts to look like a cocoon that becomes more and more disconnected from the real world surrounding it;
  
• They become overdosed with compliments on their decision-making, personality, character and looks, while at the same time they suffer from a lack of critical and contradictive people around them;
  
• They start to believe in their own divinity and truly think that everything they do is God-given;
  
• In the end, they can’t see the difference anymore between their own property and interest and other people’s properties and interests: “what is good for me personally, is good for my company or country”;
  
• The worst victims of this ‘leaders-disease’ start to get rid of people who stand in their way or pose a (future) hazard for their position: sometimes by firing them and sometimes even by simply killing them or making their life impossible; 

I came to these reflections under influence of three events last week:

• The nationalization of SNS Reaal NV in The Netherlands, as a consequence of past mismanagement and recklessness;
  
• The sudden, serious illness of a member of the (in)famous Pussy Riot punk-rock group in Russia, caused by fatigue as a consequence of forced labour;
  
• The hacks into the computer systems of the Washington Post, by presumably Chinese government officials, who want to intercept / terminate unfavorable news on China in the most important and authorative foreign newspapers; 

Ultimately, all these events have  been caused by leaders who started to believe in their own divinity and couldn’t stand criticism on their position.

The leader of SNS Reaal

Sjoerd van Keulen was CEO of SNS Reaal NV, a combination of a relatively small Savings and Loans bank and an insurance company in The Netherlands. 

This bank/insurer was doing fine and it had a rock-solid future ahead, as it filled the void that the large bank/insurers Fortis ASR and ING Groep (ING) and the large banks ABN Amro and Rabobank left open.

However, in the mind of ‘leader’ Van Keulen, this small, but sturdy bank was not ‘exciting enough’. In 2006, Van Keulen guided SNS Reaal through an IPO at the Amsterdam Exchange (AEX) and – with the shareholder money burning in his pockets – he started a take-over spree that left the CEO’s of ING Groep NV, Fortis-bank and ABN Amro flabbergasted.

Van Keulen and his henchmen took over:

• Route Mobiel, an emergency car breakdown service, that was directly competing with the emergency service of the Dutch automobile association ANWB;
  
• Bouwfonds Property Finance, a Commercial Real Estate investment company with enormous, billion-euro assets in the US, Spain, Luxemburg and The Netherlands. This company later turned out to be the Nemesis of SNS Reaal;
  
• AXA The Netherlands: the Dutch activities of the large French insurer AXA;
  
• Zwitserleven: the Dutch and Belgian activities of Swiss insurer SwissLife; 

SNS Reaal started to falter during the first months of the credit crisis in 2008: the top-heavy insurance branch of this “small bank with a big attitude” was hit heavily by the collapsing stock and bond markets and the diminishing demand for Life-insurances. Just like its peers Fortis-bank, ING and Aegon insurances, SNS Reaal needed to be rescued with state support, albeit much less than the other banks: €750 million.

At the time that the problems with the insurance branch of SNS Reaal were more or less solved, the real problem-child SNS Property Finance (formerly Bouwfonds PF) started to bleed money at an unprecedented rate, leading the bank into its demise eventually.

Afterwards, it became clear that SNS Reaal and Van Keulen had been warned for the underlying risk of their expansion plans on a number of occasions, starting as early as 2006. They had been warned for Bouwfonds through the media [FEM Business Magazine in its issue of August 5, 2006 | unfortunately no vivid link available – EL] and even by their peers Rabobank and ABN Amro, who almost reluctantly sold them Bouwfonds PF(!). Also the risk control department within SNS Reaal itself, is said to have warned the executive management.

In 2010, auditors of Ernst & Young warned SNS Reaal in a secret report that a write-off of €1.2 bln on their CRE-portfolio was inevitable.

However, as true ‘leaders’, Van Keulen and his successor Ronald Latenstein van Voorst didn’t listen to these warnings. Instead, they collected and maintained their X-mas tree of companies, only to see it crumble five years later, at the beginning of 2013. At that time, Van Keulen had already left SNS Reaal as CEO, while receiving a book for the occasion, called: “Daring as a virtue”.

There is one quote by SNS Reaal itself that I don’t want to withhold from you. It comes from the Adopted Minutes of the SNS shareholders meeting 2008 (clicking the link immediately starts the download of this PDF-file):

The chairman noted that it is hard to remain humble when one is as good as we are.

That says it all, doesn’t it?!

The leader of the Kremlin

Vladimir Vladimirovich Putin is the archetype of the modern, hedonistic leader that I try to describe in this article.

When Putin rose to power in the Kremlin as the young and dynamic successor of the notorious “boozer” Boris Yeltsin, he seemed like a down-to-earth and sensible Russian president. Approachable, intelligent, humorous (albeit sometimes quite vulgar) and from a common, middle-class descent, with good knowledge of the German language. At the time, this enormously helped Russia’s relation with the Germany of Bundeskanzler Gerhard Schröder.

He was a former student of the State University of St-Petersburg, who had enjoyed a brilliant career in the Russian Secret Service KGB/FSB.  And although Putin had some good friends-with-a-dark-past, it seemed that he could further normalize the relation with the West from the point where Gorbachev and Yeltsin left it. 

However, after a few years Putin got corrupted by the power and influence that the Kremlin stands for. He became a victim of his own cocoon of compliments and (forced) admiration, protection and lack of contradiction and criticism.

In other words, Putin turned into a solar king, like Louis XIV:

• Putin’s own actions became more and more audacious (take f.i. the fatally messed-up liberation action of Russian children, taken hostage by Chechnian terrorists or the murder on Alexander Litvinenko that people surrounding Putin have been accused of) and grotesque (‘Putin in a Delta-wing, saving the geese…’);
  
• His humour and leadership-style became more hostile, aggressive and vulgar, alienating leaders from former adversaries and friendly countries;
  
• He started to mix up Russia’s interests and his own: for instance by using Gazprom as his personal pension plan or by appointing his ‘henchman’ Dmitriy Medvedev as his (temporary) successor, while changing the constitution, so he could remain in charge as president for two more stints;
  
• On top of that, he allowed that his friends and trustees built up their own empires at the expense of the Russian people. 

Deepest point during Putin’s presidency: the arrest and year-long imprisonment of the harmless punk-rock group Pussy Riot, that dared to criticise and personally offend him in a Russian-Orthodox church.

During the last Russian elections, Vladimir Putin has for the second time been re-elected as president of Russia. Apart from the blatant signals of election fraud during this day, there is still a majority of Russians that trusts him better than they trust the opposition.

However, if Putin’s increasingly erratic behaviour of the last few years is a tell-tale signal, Putin is not certain at all that this group will remain loyal to him in the future. It could be that if Putin stays in charge a few years longer, the Russian people will finally become fed up with him and will try to impeach him or even worse. Time will tell…

The leaders of China

Under a thin capitalistic varnish, China is still very much the communist country that it had been since the days of Mao Zedong. In this context, I mean communist as in ‘all animals are equal, but some animals are more equal than others’. And China will probably remain to be so for a very long time. To paraphrase Keyser Sösze from the classical movie ‘The Usual Suspects’: ‘the greatest trick the devil ever pulled, was convincing the world he didn’t exist anymore’.

Although there is now much more room in China for entrepreneurship, it is the kind of entrepreneurship that only benefits a relatively small group of people, while ignoring or even hurting the interests of the largest group of Chinese: the common people.

Protests of these common people against the inequality of the Chinese society, the environmental damage and straightforward abuses of workers caused by these entrepreneurs, have often been brought down in the most brutal manner by the local and central authorities. Many Chinese protestors paid the ultimate price for their protests.

The ‘most equal’ group in China are the leaders of the executive committee of the Chinese Communist party: leaders like current president Hu Jintao and PM Wen Jiabao and the future president Xi Jinping. While they try to look like simple civil servants in their uniform-like, common blue suits, reality is very different. These are people with unlimited power and – as a consequence – probably unlimited wealth.

There are two things that the current Chinese leadership are extremely allergic to:

• Losing control over the people of their country;
• Criticism on them personally and on their position;

How extreme the Chinese desire for total control, ‘peace and quiet’ is, became already dramatically clear during the events at the Tiananmen Square in 1989, that cost the life of hundreds and maybe even thousands of protestors. Now, more than 24 years later, it is still not clear how many people have been massacred on this doomed day in June, 1989.

Even today, this desire for total control by the Chinese government is very much alive and kicking. Numerous local and national dissidents have been killed in the past. Others have either been imprisoned or they live at home in fear, being stalked and intimidated 24-7 by the police and government officials that follow all their whereabouts.

While the internet had initially been allowed and partially ignored by the Chinese government as being harmless, this changed during the last years. 

The Chinese government got an ever tighter grip on the internet and presented internet behemots like Youtube, Yahoo and Google with ever-longer lists of do’s, don’ts and forbidden subjects. If these companies wouldn’t follow the Chinese guidance, their sites were simply shut down by the Chinese officials.

Also other sources of news and information have been victims of the Chinese control fetish. At the beginning of this year, Chinese journalists - sick and tired with the stringent government control - were protesting against a overdiligent civil servant, who had censored a critical article in the Southern Weekly newspaper.

And during the last few weeks, at least two leading American newspapers (The New York Times and the Washington Post) have been attacked by Chinese hackers, after they published critical articles about the €2.7 bln fortune that PM Wen Jiabao allegedly gathered during his stint as Prime Minister of China.

These were the last, for the time being, in a series of Chinese attacks that started in 2008, according to the following article in the New York Times:

Washington Post Joins List of News Media Hacked by the Chinese

The question is no longer who has been hacked. It’s who hasn’t?

The Washington Post can be added to the growing list of American news organizations whose computers have been penetrated by Chinese hackers.

After The New York Times reported on Wednesday that its computers as well as those of Bloomberg News had been attacked by Chinese hackers, The Wall Street Journal said on Thursday that it too had been a victim of Chinese cyberattacks.

According to people with knowledge of an investigation at The Washington Post, its computer systems were also attacked by Chinese hackers in 2012. A former Post employee said there had been hacking attempts at the Washington Post for at least four years, but none targeted the company’s newsroom. Then, last year, newsroom computers were found to be communicating with Web servers that were traced back to China, according to people with knowledge of the Post investigation who declined to speak on the record.

Security experts said that in 2008, Chinese hackers began targeting American news organizations as part of an effort to monitor coverage of Chinese issues.

In a report for clients in December, Mandiant, a computer security company, said that over the course of several investigations it found evidence that Chinese hackers had stolen e-mails, contacts and files from more than 30 journalists and executives at Western news organizations, and had maintained a “short list” of journalists for repeated attacks.Among those targeted were journalists who had written about Chinese leaders, political and legal issues in China and the telecom giants Huawei and ZTE.

One could argue that the uncharismatic and inconspicuous Chinese leaders are the total opposite from flamboyant leaders, like solar-king Vladimir Putin or bank-buccaneer Sjoerd van Keulen.

However, all these leaders have in common that:

• They all live in a self-built cocoon that clouds their vision on reality;
• They don’t accept contradiction and personal criticism anymore;
• They all confuse personal for mutual interests, dragging the people down with them that were under their responsibility; 

Summarized, they are all knights of the divine self-righteousness!

Endgame for SNS Reaal pt III: “Alea iacta est”!

“Alea iacta est” – ‘The die has been cast’

Julius Caesar, when crossing the Rubicon (49 B.C.)

Today, the Dutch Finance Minister and rookie chairman of the Euro-group Jeroen Dijsselbloem had his Caesaric moment, when he announced the (expected) nationalization of SNS Reaal NV (SR). What seemed to have been inevitable for quite a while already, became indeed effectuated today.

My prediction of last Monday, 28 January, that A. the bank would be nationalized and B. the taxpayer would foot the bill, was spot on… but with a twist:

With ABN Amro / Fortis-bank and ASR (formerly Fortis insurance, now also in hands of the state), the Dutch government has ample experience with a nationalization proces in the financial world. Probably, the Finance Ministry has – in combination with the Dutch national bank DNB - the scenarios already written down and ready for action.

Whatever happens, this will be a costly solution for the Dutch taxpayer. In this case, the taxpayer is on the hook for all the losses at SNS Property Finance.

In the process he might lose at least €2-€4 billion in real estate write-downs, plus the €750 mln in state support. To keep the bank and insurer running, an additional €2-€3 billion might be necessary, bringing the total bill for the taxpayers to €5-€6 bln.

In exchange, the Dutch taxpayer receives a bank/insurer with a few healthy parts and a lot of dead bodies. This solution seems possible and very plausible.

The twist was that the Minister did some partial burden-sharing on behalf of the shareholders and holders of subordinated bonds, but saved the normal bondholders (the former I didn’t expect, the latter I did, of course).

The real amounts that this operation will cost for the tax-payer differ slightly from my assumptions, but in general I was quite close.  One thing surprised me today: I didn’t think in advance that the Minister would have the guts to send the other banks a bill of €1 bln, but he did after all.

Here are the pertinent snips from the speech by Finance Minister Jeroen Dijsselbloem. Readers who understand Dutch can find the integral speech behind the link:

“SNS is fully in hands of the Dutch state, as a consequence from the effectuation of the Dutch Bank Intervention law. Yesterday evening nationalization was inevitable in order to prevent from fundamental problems for the bank, the bank customers, the whole banking industry and the Dutch economy.

Yesterday, at 18.00 hrs (6 P.M. CET), a deadline passed for the time-box, in which SNS by itself could have found a solution for its problems. This deadline had been set by the De Nederlandsche Bank (i.e. DNB - Dutch national bank) for SNS to raise its capital ratio. The deadline passed without SNS increasing this capital ratio. Without the intervention by the Dutch state, SNS Reaal would have certainly defaulted soon. By nationalization, the daily business and services of the bank could be secured for savers, customers with an insurance and/or bank customers.

Shareholders, holders of subordinate bonds and the large Dutch banks do a considerable part of burden sharing. Private parties pay for this solution within the boundaries that DNB considers to be responsible and appropriate. 

This burden sharing means in reality that shareholders and subordinate bondholders have been expropriated. Their claims on SNS Reaal have lost their full value.

The financial data for the Dutch state and the other stakeholders are:

• Shareholders and subordinated bond holders share totally €1 bln in the burden; 
• The Dutch state pays directly €3.7 bln for SNS Reaal:
• A capital injection of €2.2 bln 
• €0.8 bln in write-offs on the 2008 state support 
• €0.7 bln to isolate the CRE-branch from the remainder of the bank-insurer; 
• The Dutch state also supplies a roll-over credit of €1.1 bln and €5 bln in additional guarantees. 
• In 2014, the large Dutch banks pay €1 bln to the Dutch state as a kind of burden-sharing. This is justified by the fact that the deposit guarantee fund, that must be maintained and replenished by the large Dutch banks,  now will remain without claims; this would be different in case of a default at SNS Reaal NV. 

All personnel will share in the burden through a policy of wage restraint. The new CEO will be paid a much lower compensation and there will be no bonuses for the whole executive management.

The new management has the task to sell or privatize (parts of) the bank, as soon as the company is stable again and the financial markets enable such operations.

Unless something dramatic happens very soon, SNS bank will remain in state hands for the next 5-10 years to come: first on the agenda is probably the privatization of ABN Amro, but I don’t see this happen soon. 

As I wrote in my Monday issue (see the first link), I see assimilation of SNS Reaal by ABN Amro (bank) and ASR (insurance) as a plausible option for the coming 2-3 years, but that is everything that is going to happen within this amount of time, I presume. 

The circumstances at the financial markets will remain too unfavorable within the next 5-10 years to take the risk of bringing two privatized (or even one) bank(s) up for an IPO. That is just impossible. 

Summarized, this means that the Dutch tax-payer is again on the hook for  €9-odd billion in order to save a bank. That is sad, but inevitable, it seems.

From this position, I want to say that I respect Dijsselbloem’s decision concerning the nationalization of SNS Reaal and I applaude his guts to let shareholders, subordinate bondholders and the other banks do burden-sharing. Letting the normal bondholders do burden-sharing was obviously one bridge too far for the DNB, like I already predicted.

DNB-director Jan Sijbrand shared in his speech (directly after Dijsselbloem's speech) some information about the acquisition process for a private investor that could take over SNS. This process ran until yesterday evening, but it failed eventually.

Sijbrand (and Dijsselbloem earlier) confirmed that these private investors asked for guarantees and involvement from the state that were unacceptable: too much risk for the state vs too little ownership and possible revenues.

Like I stated last Monday: “No group of investors in their right minds would invest a few billion in a [commercial real estate ] bubble without a state-guarantee or another kind of financial parachute. […]

If the SNS CRE is not top-notch, which it probably isn’t, it will be very hard to sell. This makes the risk for losses a very large one, unless the bad bank property is sold to investors with an enormous discount AND a state-guarantee.

This guarantee and enormous discount was probably exactly what made the deal impossible.

The shareholders, represented by Jan Maarten Slagter of the Shareholder’s association (i.e. VEB) were not amused with the expropriation of the bank, to say the least:

“We are flabbergasted. For the first time since the expropriation of Dutch-owned shares in the Russian state railroad, shareholders are fully expropriated. We have serious doubts whether this was necessary and proportionally. We are looking into our legal position, from two points of view:

• We will ask the business branch (i.e. ‘Ondernemingskamer’) at the Amsterdam Court of Justice to investigate a case for mismanagement at SNS, since the time that the bank did an IPO (Initial Public Offering) in May, 2006;
  
• We will ask in Court whether the bank intervention law has been applicated appropriately or not.”;

How about that for risk awareness by the shareholders!

Slagter totally victimizes the shareholders and almost makes it seem like they had been obliged to buy shares of SNS Reaal in 2006 and beyond. Well, they haven’t. 

Besides that, every investor with half a brain, who had just read the daily (financial) newspapers, knew since the take-over of Bouwfonds in 2006(!) that SNS Reaal would be bad news. Nobody has been obliged to KEEP his shares until yesterday-evening?!

Perhaps a trial for mismanagement on behalf of SNS has a slight chance, but further it seems that Jan Maarten Slagter rather lets the taxpayers foot the SNS bill than the 'poor' shareholders themselves. It’s truly disgusting…

The final bombshell for the day came (of course) from the mouth of Kees de Kort, the obstinate, but savvy commentator of BNR Radio (link in Dutch):

Abn Amro, ING Groep NV (ING) and Rabobank also own very large Commercial Real Estate portfolios. 

Currently, we know that SNS has to write off at least 30% on its current CRE portfolio after an earlier series of write-offs. However, you don’t hear anything about write-offs at ABN Amro, ING or Rabo! How reliable are their annual data?! Do these banks already reckon with write-offs?

You don’t know whether these banks have better CRE portfolios than SNS or not. SNS was not the only owner of bad CRE in The Netherlands. Ergo: there must be enormous potential losses at the other banks too. Did they create reserves to handle possible write-offs in the future? Or are they just keeping up appearances?! You can put some serious question-marks at the data of these large banks.

We do, Kees! This should only be news for the ignorant and the unaware: people that should simply not invest!