catalan banks

Last April, Banc Sabadell filed a takeover offer on 100% of the shares of the UK lender TSB, partially owned by LLoyds. On Monday, the Catalan bank announced it had already exceeded the 75% minimum bid of the takeover offer, reaching 81.23% of TSB shares. However, this percentage is still likely to increase in the upcoming days, since there are 14 remaining days till the end of the takeover's acceptance period. In order to fund the transaction, the Catalan corporation will carry out a €1.61 billion capital increase (€1,607 million). Current shareholders have a preference call in this capital increase. Banc Sabadell, is one of the few banks to emerge stronger from a financial crisis that has redrawn Spain’s banking sector. Unlike many of its Spanish rivals, the bank is in good shape reporting a 50% increase in annual profits at the end of 2014 to €371.7 million. Since 2007, it has doubled in size and is now Spain’s 5^th largest bank. It achieved this mainly through an energetic programme of acquisitions in Spain and abroad. 

BBVA CEO, Angel Cano, announced on Wednesday a 3-year plan to restructure the bank's presence in Catalonia after the integration of the previously nationally-owned Catalunya Banc, which was purchased last July. The bank's 'number 2' explained they will shut down 285 branches of their network in Catalonia and lay off 1,700 employees, which is 20% of the local workforce including Catalunya Banc's staff. At the end of 2014, BBVA had 639 branches of its own in Catalonia and was working on integrating the 728 branches from the recently-purchased entity. According to the new plan, 150 branches from Catalunya Banc will be closed. According to Cano, the acquisition of the Catalan bank will start bringing positive figures to the Group’s results by 2016.  Furthermore, it is strategic, since the bank will roughly double its presence in Catalonia and will add 1.5 million clients, becoming Catalonia’s second-largest financial entity.

The number of mortgages on homes in Catalonia registered a 32.4% increase in February compared to the same figure from February 2014. This annual increase strengthens an uninterrupted trend of 10 consecutive months of annual growth. This figure is particularly important taking into account that the crash of the construction and real estate sectors, as well as the lack of bank loans, were some of the main elements of the double economic crisis that affected Catalonia and the rest of Spain between 2008 and 2014. The recovery of the mortgage market is yet another indicator of a broader recovery of the real estate market and the overall economy, although its effects on some aspects of people's lives will still need time to be noticed, such as in the reduction of the high levels of unemployment.

Last week, TSB announced Banc Sabadell's interest in purchasing all of the shares of the British bank, which is partially owned by Lloyd's. The board of the 6^th largest bank in the United Kingdom then said they would welcome the Catalan bank's takeover bid, which they set at £3.40 per share (equivalent to €4.80). This meant that Banc Sabadell would buy TSB for £1.7 billion, or €2.4 billion. At that time, the Catalan bank denied any definitive agreement had been reached and simply confirmed that there were some talks in progress. A week later, Banc Sabadell has finally announced and approved the takeover bid, on the same terms released last week. In order to fund the transaction, the Catalan corporation will carry out a €1.6 billion increase in capital. This purchase will significantly strengthen Banc Sabadell's internationalisation, dramatically increasing its presence in the UK and in London's financial circles.

TSB, which is the seventh-largest bank in the United Kingdom, confirmed on Wednesday that they have received a preliminary takeover bid of £1.7 billion (equivalent to €2.35 billion) filed by Banc Sabadell. The Catalan bank would have offered £3.40 per share (€4.80) and would be ready to buy the entire British financial entity, 50% of which is still owned by Lloyds. Sources from Sabadell have confirmed takeover talks, but they stressed that they are still preliminary in nature. After the news was released, shares of TSB increased by 26.4% while those of Banc Sabadell dropped by 7.5%, causing the Spanish Stock Exchange Authority (CNMV) to temporarily suspend trading in the Catalan bank. When Banc Sabadell returned on the stock market, its shares continued to decrease, dropping by 10.5%, but they partially recovered and ended the day with a 6.6% loss.

The 18^th Edition of the Barcelona Meeting Point will take place between 29 October and 2 November in Fira de Barcelona's Montjuic venue. The trade fair is a real estate exhibition that brings together buyers and sellers to network and learn about the latest industry trends. This year there will be 265 participating companies from 23 countries. According to the show’s President, Enric Lacalle, it will be the first edition to open in a recovering housing sector, after 6 years of crisis and setbacks. The real estate market is strengthening; there was a 36.6% increase in the acquisition of houses by foreigners in 2013 and a 12.5% rise in housing sales throughout Spain. In addition, real estate investment in Barcelona is expected to exceed €1.6 billion in 2014, 30% more than last year. In fact, 21 international investment funds will participate in the trade fair. The show will also include a series of talks and presentations, and offer financing options for property purchase.

Figures released by the Barcelona Chamber of Commerce on Monday showed that the economy of Catalonia is set to grow by 1.6% in 2014 and 2.1% in 2015. The Chamber also predicted that by 2015, there will be a 2% rise in Spain’s GDP and 1.4% in that of the Eurozone countries average. According to the President of the Chamber, Miquel Valls, the recovery of Catalan and Spanish economies is "solid", but he stressed that the "austerity in wages" must be maintained. This report comes after the success of all Catalan banks passing the stress tests issued by the European Banking Authority and the European Central Bank, which 25 banks across Europe failed. Related economic news is that the unemployment figures released for third quarter of 2014 set Catalonia’s rate at 19.1% and Spain’s at 23.67%.

The Catalan banking system boasts a strong image after the publication on Sunday of the 2014 EU-wide stress test results, issued by the European Banking Authority (EBA). All the financial entities based in Catalonia have sailed through the EBA stress test, showing they could face the most adverse economic developments with only their own resources. In the most difficult scenario, Barcelona-based CaixaBank – which is the largest bank in the Spanish market – reached a 9.3% equity ratio (CET1), Banc Sabadell got an 8.3% and Catalunya Banc an 8%. The minimum required was 5.5%, which was not reached by 24 of the 123 European banks analysed. Only one Spanish entity, Madrid-based Liberbank, would need additional capital in the worst case scenario.

Barcelona-based Caixabank has come to an agreement with Barclays Bank PLC to buy Barclays Bank SAU for €800 million. The purchase of Spain's banking business of the UK company includes 550,000 new customers, a network of 270 branches and nearly 2,400 employees. However, the agreement excludes Barclay's Spanish investment banking business and Barclaycard, which will remain in the hands of the British entity. It is expected that the transaction will become effective later this year. The restructuring process following this acquisition will cost CaixaBank an estimated €300 million. However, the elimination of duplications is expected to save the Catalan bank €70 billion gross in 2015, €80 billion in 2016 and €150 million a year from then on.

Barcelona-based CaixaBank, which leads the Spain's banking market, registers a net attribute profit of €305 million during the first half of 2014. This is 25.3% less than 2013 and it is due to extraordinary operations such as the costs of totally integrating Banc de València and the effects of 2012 regulatory regarding the restructuring of toxic real estate assets. Apart from that, the profit attributable to the banking and insurance business, which excludes real estate activity and the investments portfolio, stands at €665 million. The banking business has generated €1.72 billion, representing a 6.8% increase, and highlights the acceleration of the decrease of the delinquency rate, which fell for the second consecutive quarter and now stands at 10.78%, 88 basis points less. 

BBVA will pay €1.187 billion to the Fund for Orderly Bank Restructuring (FROB) for the nationalised Catalan bank, beating the other two offers in the final phase of the auction process presented by Santander and Barcelona-based CaixaBank. This means that Spanish taxpayers will lose €11.84 billion considering guarantees and due to the fact that the Spanish Government injected €12.622 billion into Catalunya Banc since it was nationalised in 2011. Catalunya Banc was a private bank owned by CatalunyaCaixa, the merger of three historical Catalan savings banks (Catalunya, Tarragona and Manresa). It could not face the deep restructuring process required to meet the new banking regulations. The bank had a weak financial position resulting from a high exposition to toxic real estate and mortgages assets, as well as suffering from poor management. The BBVA will become the second largest bank operating in Catalonia, doubling its past position.

CatalunyaCaixa (CX) on Thursday confirmed the sale of its portfolio of high risk loans to US investment company Blackstone, consisting mainly of mortgages with a nominal value of €6.392 billion and provisions of €2.205 billion. The transaction involved the transfer of funds to a portfolio of asset-backed securities for an amount equal to its book value, €4.187 billion, with €3.615 billion supplied by Blackstone and Spain's public Fund for Orderly Bank Restructuring (FROB) providing the remaining 572 million. With this divestment, the CX solvency ratio stood at 14.9% and coverage stands at 81.6%. After this sale, the liquid assets of CX will reach €16.848 billion and the company is now ready to face its full privatisation, after it was nationalised in 2012.  In addition, Blackstone had already bought CX's real estate business in June in a €40 million operation.

On the 16^th July Barcelona art centre Caixaforumopened its last major exhibition of the season entitled ´Beauty captivates. Little treasures from the Museo del Prado´. The exhibition contains 135 small canvases from the great artists within Madrid´s museum collection such as Velázquez, El Greco, Rubens, Goya and Tiziano. It will run for almost six months, until the 5^th of January 2015. The exhibition will enable visitors to contemplate the virtuosity of great masters of painting from the 14^th to the 19^th century dealing with small-scale works. It is the second largest collection of works that a host museumhas exhibited from the Museo del Prado, one of Europe's largest art collections.