banks

Sabadell United Bank, the US subsidiary of Catalan Banc Sabadell, has strengthened its position in Florida, purchasing JGB Bank of Miami for 49.6 million dollars (€36.45 million). The Catalan company, chaired by Josep Oliu, has informed the Spanish Spanish Stock Market Authority (CNMV) about this operation on Monday. With the integration of JGB Bank, Sabadell United will become a benchmark in the U.S. state of Florida with a total of 40,000 clients, a turnover of close to 8,000 million dollars (€5,876 million) and 27 branches. The operation began in December and now, in July, the bank has received the necessary authorisation from regulatory bodies within schedule.

Josep Oliu admitted in an interview that the bank “does not have a plan B” in case of a break-up of Catalonia from Spain. The chairman of the Catalan financial institution admitted that they do not contemplate the independence of Catalonia as a feasible scenario. “Reaching agreements, changing some things, giving in a bit, trying to find a settlement suitable for everyone, that’s what we are all hoping for”, Oliu said. Commenting on the state of the economy, the banker regretted that politicians in government in Spain and Catalonia seem to be “ashamed” of the economic policies that they are introducing, when they should “explain to people that they are reasonable”.

The Barcelona-based bank, which was totally nationalised in December 2012 and received a €9.08 billion bailout, has made profits of €532.2 million in 2013, which would represent €167.8 million without the extraordinary profits. In 2012, CatalunyaCaixa posted losses of €11.86 billion. In 2013, the operational costs were reduced by 13.1%, having drastically reduced the number of employees and branches. The bank's capital ratio is now 14.36% and the main capital following Basel III criteria reached 12.3%, which represents liquidity of €15.01 billion. With these figures, the Spanish Government is in a better position to sell CatalunyaCaixa, which forecasts profits also for 2014. This company was the result of merging the banking business of 3 savings banks in 2011: Caixa Catalunya, Caixa Tarragona and Caixa Manresa, which disappeared after a long tradition of social work. The operation was part of Spain's restructuring of the banking sector.

On Wednesday evening the main Catalan small- and medium-sized enterprises association, Pimec, organised a protest conference in which they accused the Spanish and Catalan Governments of politically and financially "discriminating" against them. With the slogan #diguemprou (#wesayenough) 1,400 owners of SMEs and self-employed workers protested against both Governments for not taking SMEs into account and only working for the interests of large corporations. The protest was explicitly backed by 220 guilds and associations, as well as by 9 professional associations and that of self-employed workers. The event issued a manifesto compiling a list of grievances, split into 7 different areas: entrepreneurship; loans and funding; taxation; labour market; energy; training and employment; and internationalisation.

On Tuesday the Barcelona-based bank, which is the largest financial entity within the Spanish market, attracted a strong €2.6 billion demand, 88% of which came from international investors. It was CaixaBank's 10-year mortgage covered bond first issue since 2007, before the financial crisis. The operation will boost the Catalan bank's liquidity position, which stood at €60.762 billion at year-end 2013, 17.9% of its total assets. In addition, it satisfies demand from institutional investors for this product. The issue price was 80 basis points over the mid-swap rate and better than expected thanks to strong investor demand. This means CaixaBank sold the mortgage covered bonds at an interest rate of 2.625%, 67 basis points below the last rate for a similar issue by the Spanish Treasury.

The Catalan Minister for Territory and Sustainability, Santi Vila, who is also in charge of housing policies, presented on Tuesday the draft of a new tax bill on empty flats and houses owned by financial institutions in Catalonia. During a press conference, Vila explained that such a tax is looking to be an “incentive” for banks to make available their 15,000 flats spread across 70 municipalities with “proven demand” for housing, mainly around Barcelona, Tarragona, Lleida and Girona, and which have been empty for more than 2 years without a justified cause. The amount of the tax will be based on the total number of square meters owned by the banks and will include significant accumulative bonuses if the institutions decide to rent their properties, notably for social housing. The Catalan Government estimates that banks own around 40,000 empty flats, including in areas with housing demand.

Barcelona-based CaixaBank, Spain’s largest bank, has earned €503 million in 2013, representing a 118 % increase on 2012. The private bank mostly owned by La Caixa has left behind a 4-year-long downward trend in profits which can be traced back to December 2009, towards the start of the economic crisis. This result was successfully reached by trying to maintain a similar provision volume than in 2012, which resulted in consuming €7.5 billion, meaning 4.81 % less than what was spent last year. The integration of Banca Cívica and Banc de València have contributed to a growth of the market share to 27.4 %. The bank’s core capital, which is the main solvency indicator, stood at 12.9% according to Basel II regulations and at 11.7% according to Basel III regulations.

Banc Sabadell, the second largest banking company in Catalonia, has ended 2013 with a net profit of €247.8 million, three times more than in 2012, after consuming €1,736.6 million in provisions and allowances for non-payments of loans, impairment of property and other financial operations. Due to the new regulations of the Bank of Spain on credit repayment and the acquisitions of other banking companies, the percentage of delayed or unpaid loans has climbed to 13.63%, 46% more than in 2012. Without the refunding operations, it would have been fixed at 11.13 %. The bank’s core capital, which is the main solvency indicator, stood at 12% and, with the new Basel III, it was set at 10.1%. Jaume Guardiola, CEO of Sabadell, believes that this trend can be the “turning point” of a crisis that was first anticipated when the results for 2012 were announced.

The President of the Catalan Government, Artur Mas, replied that “nobody believes” in the “apocalyptic” message sent by the Governor of the Bank of Spain, who was appointed by the current Spanish Government in 2012. Mas asked Luís María Linde for “caution” and “to serve the whole of Spain and do not take sides”. Linde stated in Madrid that “independence is unviable”. He argued that the European Central Bank only funds Member States and thus Catalonia would be “obliged to issue its own currency” and have “its own banking supervisor”. On the same day, the Spanish Finance Minister, Cristóbal Montoro, said that if Catalonia were independent it would have “to abandon the Euro” and this could even lead to putting the entire Eurozone at risk. However, in September the European Commission confirmed that an independent Catalonia could continue to use the Euro in different scenarios.

The Catalan Government approves a decree to transform the Catalan Institute of Finance (ICF) into a publicly-owned bank to support business and particularly SMEs. With this change, the Catalan Executive’saim is “to strengthen the ICF’s role as a tool to support business and the productive economy”, as the Government’s Spokesperson, Francesc Homs, told the press on Tuesday. The measure is part of the Parliamentary Stability Agreement signed between the Left-Wing Catalan Independence Party (ERC) and the governing Centre-Right Catalan Nationalism Coalition (CiU).

Banc Sabadell has managed to integrate the entire network of Caixa Penedès’ branches in Catalonia and Aragón, as well as all the technological and operational platforms. With this last integration, Banc Sabadell has €170 billion in assets, around 6 million clients and 12% of Spain’s banking branches. This means that the Catalan bank is now the 4^th largest retail financial entity in Spain, after the Barcelona-based CaixaBank, Santander and BBVA. Banc Sabadell bought Caixa Penedès’ banking business in Catalonia and Aragón to Banco Mare Nostrum (BNM) in May. In only 5 months, Banc Sabadell has added 376 branches to its network, along with 545 million client registers and 900,000 clients. In the last year, the Catalan bank has doubled the size of its network, since it also integrated the Caja de Ahorros del Mediterráneo (CAM) network.

The Barcelona-based nationalised Catalunya Banc has reached a first deal with unions on the announced mass lay-off. The deal includes voluntary redundancies instead of early retirements, and the possibility for 401 workers over 50 years old to leave the company. The agreement was reached in the early hours of Wednesday morning, after a long day of talks on Tuesday. Catalunya Banc runs the banking business of the nationalised savings bank CatalunyaCaixa, which will be sold in the coming months after a comprehensive restructuring process. Talks are still ongoing in order to close a definitive deal and the definitive agreement has now to be ratified by the bank’s Board.

In addition, CaixaBank declares that “it will take all the opportunities” to grow in the Spanish market. The Catalan CaixaBank, which is Spain’s main retail bank, has sold €1 billion in 3.5 year bonds, after a market demand of €2.8 billion. In fact, the large demand made the issue price drop from 180 to 170 basic points on ‘midswap’, which is the reference index for this sort of corporate bonds. The issue interest was set at 2.5% and the issue cost represents 18.5 basic points over the Spanish Treasury Debt’s price. The new issue by CaixaBank is part of the bank’s financial plan for 2013, which aims to strengthen CaixaBank’s liquidity, set to reach 64.604 billion by 30^th June.

The founder and CEO of technology company GFT announced that they will create 500 new jobs in Catalonia in the coming years. In an exclusive interview with the CNA, Ulrich Dietz, stated that he has “aggressive plans to increase the staff” in Greater Barcelona and Lleida. GFT  specialises in developing technological solutions for the banking and insurance sectors, with a turnover of €231 million in 2012. With several offices in Germany, the company is based in Stuttgart and is present in Brazil, France, Italy, Switzerland, Spain, US and UK. A quarter of GFT employees throughout the world are based in Catalonia. Most of them work in Greater Barcelona, which is the company’s “hub” for the European market. Dietz explained that he has plans to develop Lleida’s facilities, which currently employ 40 people, “significantly”.

The Board of Directors of Catalonia-based Banc Sabadell has approved a capital increase operation of €1.4 billion. The transaction will take place in the form of two consecutive increases in order to “strengthen capital and allow new important shareholders to join the bank aiming [to reinforce] the future internationalisation process of the bank”. The decision by Sabadell, Spain’s fifth largest bank, to carry out this operation was taken after finding out about the “growing interest” of international investors to acquire stable assets of the Catalan financial entity. It is expected that at least €1.33 billion will be attracted, which will subsequently make Banc Sabadell to one of the best capitalised banks in Europe with a core capital beyond 11%.