Kutxa Jumps Into the Sale of CatalunyaBanc

14/07/2014 – El Confidencial

The third auction of the nationalized bank enters the final stage. Today passes the deadline for the binding bids for the €6.5 billion worth of non-performing loans of CatalunyaBanc, while Friday is the last day for the final offers for the entity itself.

Suddenly, KutxaBank barged in the auction with such an impetus that it may stand up to the bids of Santander, CaixaBank, BBVA and Societe Generale. Out of these four, BBVA has shown the weakest interest by now as the bank had already gained a market share in Catalonia with the purchase of Unnim. Societe Generale allegedly wishes to enter the business, replacing leaving Citi and Barclays.

The most serious about the sale is Santander, left behind by the “blue bank” and La Caixa in terms of share in the region. In fact, the entity almost acquired CatalunyaBanc at the second try, however its offer was eventually rejected.

Recently, the auction got undermined by the news on a non-provisioned, €1.4 billion hole in the nationalized entity.

In the present situation, the sale of the mortgages seems to be the key. Although the Fund for Orderly Banking Restructuring (Frob) has decided to save a part of the problematic loan portfolio (and thereby reduce the state assistance to below €1.5 billion), the bidding is threatened by a next suspension. Like it happened in case of the sale of the offices of CatalunyaBanc when its only competitors abandoned the process after not having obtained pleaded public aid and parts of the portfolio.

However, Frob is relentless: if the bidders demand more public assistance and their offers do not reach the minimum required by the Ministry of Economic Affairs, the auction will be called off and CatalunyaBanc shut down for good.


Original article: El Confidencial (by Eduardo Segovia)

Translation: AURA REE