This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

BBVA Buys Catalunya Banc From Spanish State

NEW YORK (The Deal) -- Spain's Banco Bilbao Vizcaya Argentaria (BBVA) has agreed to pay 1.19 billion euros ($1.6 billion) for Catalunya Banc, one of the last Spanish lenders that remains under state control.

BBVA won an auction held by Spain's Fondo de Reestructuracion Ordenada Bancaria, or Frob, the state-backed fund that was charged with rescuing and restructuring failed Spanish lenders following the collapse of Spain's real estate market in 2008.

Barcelona-based Catalunya Banc was nationalized in 2011 and received 12 billion euros of state aid to strengthen its balance sheet. Despite the injection of capital the bank failed to sell at two earlier auctions, in June 2012 and March 2013. Those failures prompted the state to split off 6.4 billion euros of Catalunya's problem loans, which it sold last week to Blackstone Group LP for 3.6 billion euros.

"This deal shows we are extremely confident in the current economic recovery," BBVA Chairman and CEO Francisco Gonzalez said in a statement. BBVA said that savings and increased selling opportunities created by the merger would exceed the 1.19 billion euros that it paid for Catalunya and that it expects the deal to have a positive impact on results from 2016.

The price paid by BBVA will fall by 267 million euros if Spanish tax authorities do not grant Catalunya certain tax breaks prior to the completion of the acquisition, the buyer said.

Catalunya Banc has 1.5 million customers, principally in the wealthy Catalonia region of Spain, and 63 billion euros in assets. The deal will boost the value of BBVA's Spanish loan portfolio by 14%, its deposits by 23% and its customer numbers by 18%. BBVA said that it will not need to raise new capital to fund the acquisition.

Frob said in a statement that it had not offered protection against further losses on Catalunya's assets as part of the deal, breaking with the practice of offering guarantees during earlier sales of bailed-out lenders.

Catalunya is the second state-owned bank acquired by BBVA, which paid 1 euro for Unmin Banc, another Catalonia-based lender, in 2013.

The Spanish state still owns a 65% stake in Banco Mare Nostrum, formed by the merger of three nationalized regional lenders in 2010. Preparations for an initial public offering of Banco Mare Nostrum shares are expected to begin next year. The state also still owns Bankia SA, the largest of the Spanish banks to be bailed out and the only lender on which Frob is likely to make a profit. The state sold a 7.5% stake in Bankia in February for 1.3 billion euros, booking a net gain of 301 million euros.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BBVA $10.11 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs