sabadell

CaixaBank and Banc Sabadell close 2017 with big turnover, despite crisis between Catalonia and Spain

Protesters at November 10 demonstration demanded the incarceration of Carles Puigdemont and resignation of Sabadell’s mayor

Spanish government preparing new law to facilitate relocation of companies and banks outside of Catalonia

The 65th edition of the Barcelona Open Banc Sabadell -commonly called the Conde de Godó tournament- has begun this weekend and runs through until the 30th April. The tournament goes back a long way as it was held for the first time in 1953. The competition is organized by the Barcelona Royal Tennis Club (RCTB) and has a big impact on the city of Barcelona and the European clay court circuit given the presence each year of club member Rafael Nadal. In this 2017 edition, the Godó can count on the presence of world number one Andy Murray and Henri Kontinen, the leading players on the ATP single and doubles rankings respectively.

The Catalan banking group Banc Sabadell earned €708.4 million in 2015, according to figures published by the company. This result is 90.6% higher than that obtained in 2014. The good result of Banc Sabadell in 2015 is mainly due to the integration of the UK bank TSB in June, which added accounts worth €122 million. Without this operation, Banc Sabadell’s net profits would only had grown by 57.8%. Thus, net interest income, which measures the bank’s ordinary activity of receiving deposits and authorising credit, was €3.203 billion, 41.7% higher than in 2014. The internationalisation of Banc Sabadell has already been consolidated and 32% of the credits were authorised abroad. In 2014, this percentage was 6%. The default rate, which has dropped to 7.79%, 5 points less than in 2014, also contributed to Banc Sabadell’s positive result.

The Catalan bank Sabadell has completed the process of compulsory acquisition of all TSB Banking Group (TSB) shares, thereby taking ownership of 100% of this British entity’s share capital. The move completes the takeover started last spring, when TSB accepted the 1.7bn-pound offer made by Banc Sabadell. Through buying TSB, Banc Sabadell has expanded its international presence, with its percentage of foreign assets growing from 5% to 22%. TSB has 631 branches, 4.6 million customers and 8,600 employees in the United Kingdom.

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. 

The Catalan Police Force, Mossos d'Esquadra, detained on Wednesday in several cities across Greater Barcelona 11 people who were allegedly forming an Islamic terrorist cell. The cell was "operational" and "wanted to attack in Catalonia", according to the Catalan Minister for Home Affairs, Ramon Espadaler. The alleged terrorists were "clearly connected to the Islamic State" and "supported its ideology", emphasised Espadaler. The cell "had 3 objectives": "recruiting young people and radicalising them", "sending some of these young people to Syria and Iraq", and preparing an attack in Catalonia. Despite this information, Espadaler highlighted that "at no time has this cell generated any kind of danger, as it has been under investigation and police surveillance for the last 13 months".

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 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.

Comparing Catalonia's self-determination process with the Nazi regime has become one of the arguments the Spanish nationalists have used over the last two years, repeated in extreme-right television stations and even at the Spanish Parliament. Such an offensive comparison outrages most of Catalan society, for its total unfairness in describing a democratic process and for trivialising Nazism and the suffering of its victims. Now, the issue has reached the European Parliament, where the Spanish nationalist party UPyD sent a letter to all 751 MEPs comparing the situation in Catalonia with that of "Italy and Germany in the 1920s and 1930s". The CDU MEP Ingeborg Grässle was outraged by the letter and urged UPyD "to at least apologise". "Any politician in Germany would have immediately resigned", she added. Besides, civil society organisations in Barcelona have filed a complaint to the Public Prosecutor Office against dozens of calumnies against self-determination process and its comparison to Nazism.

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 Japanese tennis player wins his first Godó Trophy in the 62^nd edition of the tournament. Kei Nishikori, ranked 17^th in the world, clinched his first clay court title after beating Columbian sensation Santiago Giraldo in straight sets and ascending five spots on the ATP rankings at the Barcelona Open Banc Sabadell. After just an hour and thirteen minutes of play the fourth seed defeated his opponent 6-2, 6-2, becoming the first Japanese player to win the title. The Asian no. 1 becomes the first non-Spanish tennis player to lift the trophy in twelve years. A surprising turn of events saw several high profile players exit early in both the Men’s Singles and Doubles Championship. The Men’s Doubles surprised the crowd as Dutchman Jesse Huta Galung and French player Stéphane Robert paired up on Friday amazingly clinched their first title.