Sareb chairwoman Belen Romana is putting Echegoyen forward for the post amid a reorganization to improve portfolio management and adapt to market changes, it said in a statement. It’s the first time a CEO has been appointed and follows the resignation of Walter de Luna as director general last month.

The government set up Sareb in 2012 to absorb 50.8 billion euros ($69.8 billion) in real estate assets from lenders including the Bankia group as part of a bailout program after the Spanish property market slumped. Property price declines and the deterioration of loans’ credit quality are challenges for Sareb’s cash flow and profitability, the International Monetary Fund said in a report this month.

Bad loans as a proportion of total lending in Spain rose to a record 13.6 percent in December, compared with 13.1 percent in November as companies and consumers kept missing payments in an economy that’s still not growing fast enough to create new jobs. Sareb made major progress in 2013 in developing its organization and accelerating asset liquidation, the IMF said in its report.

As part of the overhaul, Sareb has created a commercial department to oversee asset sales led by Juan Barba and a restructuring and recovery team to better manage credit risk. To guarantee generating value, Sareb also created two new areas of assets and strategy.

Banco Popular Espanol SA is replacing its Sareb board member Francisco Sancha with Rafael de Mena, and the appointment of new board members will be voted at the next shareholder meeting, according to the statement.

To contact the reporter on this story: Katie Linsell in Madrid at klinsell@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

http://www.bloomberg.com/news/2014-02-23/spain-s-sareb-to-appoint-jaime-echegoyen-ceo-amid-reorganization.html

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