CaixaBank begins its trading on the stock exchange and Moody’s improves its rating
The new bank becomes Spain’s third financial institution for its stock exchange value and the ninth in the Ibex-35 Spanish index. CaixaBank is the result of Barcelona-based savings bank La Caixa’s transformation into a private bank in order to strengthen its structure and position in the market, after the sector restructuration. The day CaixaBank was listed for the first time on the stock exchange, the rating agency Moody’s improved CaixaBank’s appreciation. However, after an initial increase CaixaBank’s value dropped by 1.1%. It is the first Spanish savings bank that concludes its transformation and trade on the stock exchange.
Barcelona (ACN).- CaixaBank begun its trading on the stock exchange this Friday July 1st, a step that concludes La Caixa’s transformation process. CaixaBank is the retail bank that absorbs all the banking and loan business of Barcelona-based savings bank La Caixa, as well as some stocks from third party companies. It has been built on Criteria CaixaCorp, the industrial holding corporation of La Caixa. The Catalan savings bank will continue to exist, but will step aside from the banking business; it will own most of CaixaBank’s shares. The transformation was part of the restructuring process Spanish savings banks are going through to meet with Basel III conditions and strengthen themselves. CaixaBank currently has a core capital of 10.9%, and a value on the stock exchange of 16 billion euros, which makes it the third financial institution in Spain, after Santander and BBVA. In addition, CaixaBank will be the tenth largest bank in Europe. It will still be controlled and mainly owned by La Caixa, but open to new investors. The bank’s Chairman Isidre Fainé struck the bell at Madrid’ Stock Exchange on Friday at noon when CaixaBank began trading and substituted Criteria Caixa Corp’s. The day CaixaBank was listed for the first time on the stock exchange, the rating agency Moody’s improved CaixaBank’s appreciation. However, after an initial increase CaixaBank’s value dropped by 1.1%. The bank is the ninth most important company in Spain’s stock market, listed in the Ibex-35 index. It is the first Spanish savings bank that concludes its transformation and trade on the stock exchange. Next July 20th, Bankia, the banking group of Caja Madrid, Bancaja and other savings banks, will begin its trading, with a stock exchange capitalisation of 8 billion euros, being the 14th on the Ibex-35.
CaixaBank is the tenth largest bank in stock exchange capitalisation within the Eurozone. It is born with a core capital of almost 11% (10.9%), assets worth 265.5 billion euros and 10.5 million clients. The new retail bank is built on Criteria CaixaCorp’s assets and it absorbs the entire La Caixa banking business, which was the first savings bank in Europe. Caixabank will hold stocks from third party companies, but not all La Caixa’s. The savings bank will create a special holding besides to CaixaBank that will control the rest of the industrial shares and the real estate business. La Caixa’s debt of 8.6 billion will not be transferred to CaixaBank and will still be in La Caixa’s hands. In fact, the savings bank La Caixa will continue to exist as the main owner of CaixaBank and will get its funding from the retail bank's profits. La Caixa will also manage the La Caixa Foundation, which will continue with its social work.
CaixaBank’s Chairman Isidre Fainé stated that the group’s reorganisation will keep the current business and enables it to enter into the capital market and profit from new growth opportunities. “I think that as Catalans we are very much interested to be present in the rest of the world and have a presence in the rest of Spain, Europe, America and Asia”, he explained to the media present at the event in Madrid. Fainé emphasised the importance of La Caixa’s restructuring for the company but also for the entire Spanish economy. “I would like the bell to be heard, together with those that will follow this month, to have a direction change not only for the companies trading on the stock exchange, but for the entire Spanish economy and for all its citizens” he concluded.
The new logo, at the top of Barcelona’s headquarters
Coinciding with the inscription at the mercantile registry last Thursday, La Caixa’s headquarters unveiled the new name crowning one of the two towers, icons of the power of the main Catalan financial institution. CaixaBank’s name from yesterday is displayed on top of the smallest tower, substituting CaixaCorp’s brand. The change will also be done at the Barcelona-based banks it has in Madrid.
Moody's improves CaixaBank’s rating
The transformation process of La Caixa into CaixaBank is well appreciated by the rating agency Moody’s. Moody’s issued a press release coinciding with the day CaixaBank started trading on the stock exchange in which it announced the rating improvement regarding CaixaBank’s long term debt, passing from A2 to Aa2. It is an important improvement, of three grades on Moody’s scale. However, Moody’s has decreased La Caixa’s rating by two scales, as the savings bank will keep all the 8.6 billion debt and will mainly depend on CaixaBank’s profits. However, La Caixa’s profits were always high, and it is expected that CaixaBank’s will continue along the same trend. In addition, La Caixa completely controls CaixaBank and can thus decide to transfer part of the profits to the shareholders. Despite the negative appreciation, Moody’s recognises that the negative perspective could be reviewed in the next months.