Catalunya Banc Goes to BBVA For €1.13 Bn

23/07/2014 – Cinco Dias

Neither Santander, nor La Caixa. We officially got to know the winner of the bidding for Catalunya Banc. BBVA paid €1.13 billion for 98.4% of the nationalized bank (the amount for 100% would have risen to €1.19 bn). With the operation, the entity raises its market share in Catalonia from 12.3% to 24.9% and takes “the bank number 1” position in Spain.

Moreover, with the purchase BBVA grabbed 3.5 billion state-backed tax credits, 3.6 million clients and 715 branches of the nationalized bank. As another perk, the Fund for Banking Restructuring (known as FROB) pledged to bear the cost of claims on preferrent shares, abusive clauses, swaps and the possible compensation for Mapfre in case of the contract breach. In total, the Fund will pay over €400 million.

The Frob writes-off the €11.5 billion out of the total €13.6 billion state bail-out granted to Catalunya Banc. The amount also includes the €572 million aid given to Blackstone when the fund purchased the soured loan portfolio from the enity a week ago.

Perhaps the Spanish Government believed in the saying “third time lucky” as the two previous attempts to offload Catalunya Banc ended up in failure.

BBVA outbidded sure-bet Santander and La Caixa, whereas Societe Generale finally did not submit any offer. The “blue bank” had bought nationalized Catalonian entity Unnim for just one Euro in 2012. Catalunya Banc was the last bank for sale in hands of the State as Bankia and BMN have got their own plans based on selling-out shares.

 

Original article: Cinco Días (by Ángeles Gonzalo Alconada)

Translation: AURA REE

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