The Ministry of the Economy says that the bad bank will incur losses during the first several years, because at the beginning operating costs will run high and the real estate market will have to recover before it starts to show a profit.
Still, the government says that for the bad bank's fifteen year lifespan it should yield around 14-15%. A return this high would make taxpayers more content with the bill that they are footing to clean up the banking sector. If the bad bank will need several years to make money, then this delay has not been factored into its share price as much as it should. Plus, there is always the risk that credit markets won't start flowing as soon as expected.
