Banc Sabadell rules out buying CatalunyaCaixa in the short-term

However, the Catalan bank does not close the door to integrating a financial entity in the future. Banc Sabadell wants to take advantatge of the restructuring process of the financial system to grow throughout Spain, told its President Josep Oliu.

CNA / Laura Pous / Clàudia G. Novellón

March 14, 2011 05:46 PM

Barcelona (ACN).- Banc Sabadell ruled out buying the savings bank CatalunyaCaixa in the short term. This decision was confirmed by the bank’s President, Josep Oliu, during a visit to London where he met British investors to present the future plans of the bank. Oliu told the press that “Banc Sabadell will continue its course” and will not promote the integration of any savings bank until the restructuring process of the system is consolidated. “This is not an objective for us at the moment and it is not in our plans to do so”, said Oliu when asked about a possible purchase of CatalunyaCaixa. However, he admitted that, in the “future”, opportunities to carry out new projects “will increase significantly”.

According to Oliu, once the restructuring process of the Spanish financial system is consolidated, “the opportunities to carry out joint projects will significantly increase because there will be more players with criteria about market and earnings per share”. Oliu added that the first priority of the bank is the “organic growth” of the company within Spain and that the process of mergers and transformations of savings banks “will leave an empty space so that those financial entities that have not been restructured may have the opportunity to make sensitive organic growths regarding both investments and deposits”.

The master plan of the financial entity over the next three years does not include an expansion of the number of bank offices. Oliu said that growth will be through deposits and investments. “During this period there will come a turning point towards an increase in profitability”, he assured. The bank plans to attract one million new customers over the next three years, with an increase of 1% in market share and an investment growth rate of 5%. Oliu expects the number of deposits of the Catalan bank to grow by 10% on average.

After this “priority” process, Oliu does not rule out the acquisition of or collaboration with some new banks which may emerge from the restructuring process of savings banks. According to Oliu, there is “space” for other entities to join the Banc Sabadell project later on. “We will not force anybody”, he said. The President of the Catalan bank reiterated that the restructuring process of the savings banks still generates ‘uncertainties’ that must be resolved before starting any integration process.

Oliu also admitted that the conversion process of the savings banks into banks “still takes time” and added that there is still “a risk” that not all the savings banks get financing from markets or other entities, and may require resources from the Orderly Bank Restructuring Fund (FROB) of the Spanish Government. The President said that in three years the bank will analyse its international presence, and could initiate new projects to diversify abroad. At present, Banc Sabadell has bank branches devoted to companies in London, Paris, Casablanca and Miami, where it made the purchase of a local financial entity. “We have a small project in the United States and possibly in the coming years we may have another one”, he said.

Oliu said he had had a very warm reception from investors even though he has perceived fears due to the situation of the real estate market. On the other hand, he indicated that British investors are “very interested” in knowing “the hows and whys of the savings bank conversion process and their search for capital” and said that British investors “are studying where they can or cannot invest”.