catalan banks

The British financial magazine ‘Euromoney’ has named the Catalan CaixaBank the world’s best bank in a technological innovation ranking. Furthermore, the publication considered CaixaBank to be the best Spanish bank for the second consecutive year. The Catalan entity is the largest bank within the Spanish market, ahead of the two world giants Santander and BBVA. Furthermore, CaixaBank leads online banking in Spain with 8.8 million clients.

The Catalan company, which is the main bank operating in the Spanish market, will sell half of its shares in the Mexican GFI, the financial group owned by the billionaire Carlos Slim. Caixabank currently controls 20% of the GFI shares. The Catalan bank has confirmed it will sell 3.7% of GF Inbursa to Inmobiliaria Carso, which is also owned by the Slim family, for €387 million, corresponding to 250 million shares. With this operation, Caixabank will earn a capital gain of €33 million. Besides, the Catalan bank aims to sell another 6.4% of GIF shares to institutional and retail investors from Mexico and international markets. After completing both sales, Caixabank will control between 9% and 9.9% of GFI.

In a situation of difficult access to credit by Catalan and Spanish companies, Barcelona’s Chamber of Commerce and the main Spanish bank – which is based in the Catalan capital – have agreed to open a new credit line for the 25,000 private companies (small, medium-sized and large) and independent workers affiliated to the Chamber’s ‘Club Cambra’. In January 2012 they created the first credit fund with €2 billion. Now, a total of €3 billion will be available, of which €1 billion will be for internationalisation projects. CaixaBank’s President, Isidre Fainé, and the President of the Chamber, Miquel Valls, signed the new agreement on Wednesday.

The Catalan financial entity Banc Sabadell reached an agreement with the Dutch insurance company AEGON on Friday to buy 50% of the shares of Mediterráneo Vida, S.A. de Seguros y Reaseguros, the joint venture originally established with Caja de Ahorros del Mediterráneo. The operation is on the condition that they receive the green light from the regulatory authorities. The transaction will allow Banc Sabadell to own 100% of Mediterráneo Vida, S.A. With the operation, the Catalan bank will move forward in the organisation of its insurance subsidiaries and affiliates.

The Catalan Banc Sabadell has bought all the shares in the Lloyds subsidiary companies in Spain: Lloyds Bank International and Lloyds Investment. Banc Sabadell paid €84 million that will be paid through giving 53.75 million shares in the Catalan bank to the British banking giant. This way, Lloyds will control 1.8% of Banc Sabadell’s total shares. The agreement foresees than the UK group will become a “stable shareholder”, since Lloyds has committed to keeping the stocks for at least two years. With the operation, the Catalan bank will control the Lloyds retail and investment businesses in Spain, where the UK company has 28 branches, €1.79 billion in loans and €760 million in deposits.

On Wednesday it became known that the Catalan Banc Sabadell would acquire Banco Gallego from the Spanish Fund for Orderly Banking Restructuring (FROB). However, the details of the operation were still being discussed and no detailed information was disclosed. On Friday, it was stated that the FROB – owned by the Spanish Government and the Bank of Spain – will inject €245 million of public money into Banco Gallego. In exchange, Banc Sabadell will buy the financial entity for the symbolical price of 1 euro but will take care of all the potential future losses.

The offer, presented by Banc Sabadell, has won the tender for the acquisition of Banco Gallego, which was nationalised and owned by the Spanish Fund for Orderly Bank Restructuring (FROB). Banco Gallego was partially owned by Novagalicia Banco, the private bank resulting from Nova Caixa Galicia. The FROB has announced its decision although it also explained that the final details are still “being negotiated”. In the last year and a half, Banc Sabadell has bought the former Caja de Ahorros del Mediterráneo, the business activity of Caixa Penedès (part of Banco Mare Nostrum) and now Banco Gallego.

With the operation, the Barcelona-based bank, has more than 6,000 branches throughout Spain for the first time. CaixaBank, which tops the Spanish retail banking market, acquired Banca Cívica in August, which was the merger of five savings banks: Caja Navarra, Cajasol, Caja Guadalajara, Caja Canarias and Caja Burgos. From now on, all the branches, ATMs, IT systems, accounts and other financial products from all the five previous savings banks will be integrated into CaixaBank’s business. CaixaBank has adapted 1,170 ATMs from Banca Cívica, reaching a total number of 10,000 ATMs distributed throughout Spain.

The Barcelona-based bank, CaixaBank, which leads the Spanish retail banking market, is planning to lay off 3,000 workers in order “to adapt to the current context” and “improve the efficiency” of its resources. According to the Catalan financial company, the reform is “necessary” after having taken over Banca Cívica’s network and as they absorbing Banc de València’s too. CaixaBank has engaged in formal talks with the unions, which could be on-going until late April. The objective is to negotiate the exact measures to adjust the staff numbers to the business volume.

The Catalan Banc Sabadell finished 2012 with positive results and net benefits of €81.9 million. Banc Sabadell has now reached 5th position among the Spanish financial entities in the last economic exercise due to its assets valued at €175 billion. However, this figure shows a 64.7% drop in benefits in comparison to 2011. The main reason for the decrease is the €2.54 billion for provisions, 142.2% more than 2011. The President of Banc Sabadell, Josep Oliu, emphasised the company’s solvency and spoke of its capacity to buy additional entities in the international market.

The CaixaBank President, Isidre Fainé, is optimistic about 2013, which “will be better than the year left behind”. The attributable net profits of CaixaBank, Spain’s main bank, decreased by 78.2% in 2012 compared to the previous year, as the Catalan financial entity focused on fully restructuring its business and purchasing other financial entities in order to enlarge its customer base and reach 13 million clients. The Catalan bank’s customer funds increased by 19.6%, up to €288.57 billion and its loans portfolio grew by 20.1%, reaching €223.45 billion. Furthermore, CaixaBank allocated €10.3 billion for provisioning charges and write-downs. The Barcelona-based financial entity had an income of €6.74 billion and a net operating income of €3.17 billion. In addition, CaixaBank will keep its €500 million budget for its social work foundation.

The Catalan bank has issued debt securities for €1 billion that attracted a demand of €3.4 billion. As other multinational companies such as CaixaBank and Gas Natural Fenosa did this week, Banc Sabadell is profiting from the lower spread in order to pay lower interest rates than they were a few months ago. The Catalan private bank has obtained a spread of 250 basis points over the midswap rate, which is a better interest rate than that obtained by the Spanish Treasury in its recent operations.

The operation has rocketed CaixaBank shares in the Spanish stock exchange market, which increased by 11.75% in just one day. The Catalan CaixaBank, which is the largest bank in Spain, successfully issued €1 billion in 3-year senior bonds. The operation has attracted more than 300 orders from institutional investors, representing around €5 billion, which has allowed the Barcelona-based bank to sell its bonds at a better price thanks to the significant oversubscription. 80% of the bonds issued were placed among international investors, confirming the positive recognition CaixaBank has in international financial markets. It was the first time their senior bonds have been issued on the international markets since 2010.

With this decision, the Catalan Government wants “to safeguard” its power to adopt this type of tax or the equivalent revenue, after the Spanish Government announced the creation of its own tax while keeping it at 0% to prevent the Autonomous Communities from approving it. The Constitutional Court has already backed the taxes on bank deposits created by Extremadura, Andalucía and Canarias. Catalonia’s tax will not affect clients but only the banks. It will affect all banks operating in Catalonia, independent of where they are based. In addition, it will have retroactive effects as from the 30th of November. The Spanish Finance Minister warned that the Spanish Government will fully oppose it.

Banc Sabadell and Banco Mare Nostrum have reached a definitive agreement over the transfer of Caixa Penedès’ territorial network and business in Catalonia and Aragon to the Catalan bank. After this has been completed, Banc Sabadell will strengthen its retail banking activity and will have the fourth largest network of branches in Catalonia. The bank will increase its commercial network in Catalonia by 92% and will incorporate 462 branches, 900,000 clients and 2,000 workers. Caixa Penedès was a medium-sized savings bank in Catalonia. In 2010 it took part in a ‘cold merger’ with 3 other Spanish savings banks and in 2011 they created Banco Mare Nostrum.