savings bank

The Spanish banking giant BBVA, which purchased Catalunya Banc last July, is now proposing to shut down 400 branches of the acquired bank and reduce its staff by 2,000 employees (out of a total of 4,400 currently employed), according to trade union sources. At the end of April, the BBVA announced it would close 285 Catalunya Banc branches and reduce the staff by about 1,700 people. However, this Wednesday the Spanish bank has released higher figures and with this action is kicking off the official negotiation period with trade unions before it registers a mass layoff. The adjustment is to start already this year and would be completed by 2017, with the main part of it taking place during 2016. In theory it should only affect the branches that originally belonged to Catalunya Banc (CX) and the employees who were originally working for the former Catalan savings bank, and not those of the BBVA working in Catalonia. In April, Angel Cano, who is the CEO of the Spanish bank, stated that the adjustment would take place within the new integrated structure, not only in regard to the former CX branches and staff.

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.

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.

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 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 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.

The Catalan bank was nationalised in 2012 and is going through an important restructuring process before being privatised again. Currently, the financial entity is owned by the FROB (Fund for Orderly Bank Restructuring), which is run by the Bank of Spain and the Spanish Government. The FROB has been delaying the auction to sell CatalunyaBanc and is now proposing to layoff 2,453 workers of the bank and its subsidiaries, according to trade unions. This would represent firing some 34% of its staff. The company is proposing a compensation of 20 days worth of salary per year worked for those it plans to layoff, following the labour market reform, with a maximum of the equivalent to 12 months salary being given. CatalunyaBanc ended the first half of 2013 with a net profit of €183 million, after having transferred part of its real estate toxic assets to the so-called “bad bank” SAREB.

The solvency ratio stood at 10.21% of the bank’s total resources, with 9.77% of core capital. Barcelona-based CatalunyaCaixa closed the first half of 2013 with a net profit of €183 million, which have met targets to recapitalise the bank. The interest margin reached €264 million, which represents a reduction of 5.9% as a result of a credit transfer to the publicly-owned banking management company Sareb. In spite of this, the reduction is less than the average decline seen in the sector as a whole and it has seen a remarkable growth during the first half of 2012 of 14.8%.

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 bank created from Catalan savings bank CatalunyaCaixa is expected to be sold within the next two months. CatalunyaCaixa was intervened by the Bank of Spain last September 30th, as it could not reach the required core capital. The Spanish Fund for Orderly Bank Restructuring (FROB), owned by the Spanish State, currently owns 89.74% of CatalunyaBanc. The FROB has decided to disinvest in the Catalan bank, which starts a competition process that will sell 100% of CatalunyaBanc’s shares.

With this operation, the Catalan Banc Sabadell becomes Spain’s fifth largest banking group. The Bank of Spain has decided to accept Banc Sabadell’s offer to purchase the CAM, a savings bank that was rescued and restructured. Banc Sabadell buys CAM after the savings bank completed a €5.25 billion regularisation process to balance its books. Banc Sabadell will take on 20% of the expected losses over the next ten years from CAM’s real estate properties.

Unnim’s profit is 8.7% inferior to the same period last year. The savings bank says the decrease is due to of the merger costs and the general economic situation. Unnim is the result of a merger announced last summer between three Catalan saving banks. Unnim failed in the last stress test’s worst scenario, but according to the Bank of Spain will not have to be rescued.

The results are 11% higher than last year. The group stresses that has strengthened its capital standing by 11.3%, 2.4 points higher than in December 2010.