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\u2019s 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\u2019s 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\u2019s Chairman Isidre Fainé struck the bell at Madrid\u2019 Stock Exchange on Friday at noon when CaixaBank began trading and substituted Criteria Caixa Corp\u2019s. The day CaixaBank was listed for the first time on the stock exchange, the rating agency Moody\u2019s improved CaixaBank\u2019s appreciation. However, after an initial increase CaixaBank\u2019s value dropped by 1.1%. The bank is the ninth most important company in Spain\u2019s 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\u2019s 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\u2019s. 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\u2019s debt of 8.6 billion will not be transferred to CaixaBank and will still be in La Caixa\u2019s 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\u2019s Chairman Isidre Fainé stated that the group\u2019s reorganisation will keep the current business and enables it to enter into the capital market and profit from new growth opportunities. \u201CI 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\u201D, he explained to the media present at the event in Madrid. Fainé emphasised the importance of La Caixa\u2019s restructuring for the company but also for the entire Spanish economy. \u201CI 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\u201D he concluded.
The new logo, at the top of Barcelona\u2019s headquarters
Coinciding with the inscription at the mercantile registry last Thursday, La Caixa\u2019s headquarters unveiled the new name crowning one of the two towers, icons of the power of the main Catalan financial institution. CaixaBank\u2019s name from yesterday is displayed on top of the smallest tower, substituting CaixaCorp\u2019s brand. The change will also be done at the Barcelona-based banks it has in Madrid.
Moody's improves CaixaBank\u2019s rating
The transformation process of La Caixa into CaixaBank is well appreciated by the rating agency Moody\u2019s. Moody\u2019s issued a press release coinciding with the day CaixaBank started trading on the stock exchange in which it announced the rating improvement regarding CaixaBank\u2019s long term debt, passing from A2 to Aa2. It is an important improvement, of three grades on Moody\u2019s scale. However, Moody\u2019s has decreased La Caixa\u2019s rating by two scales, as the savings bank will keep all the 8.6 billion debt and will mainly depend on CaixaBank\u2019s profits. However, La Caixa\u2019s profits were always high, and it is expected that CaixaBank\u2019s 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\u2019s recognises that the negative perspective could be reviewed in the next months.