Five Days / Digitization, banking and adjustments concentration. Here are three recipes that repeated ad nauseam in recent months those responsible for supervision of the European Central Bank (ECB), Danièle Nouy, his counterpart from the European Banking Authority (EBA), Andrea Enria, and even on Friday director Monetary Affairs IMF, José Viñals, and of course, both Luis María Linde, governor of the Bank of Spain, as the deputy governor, Fernando Restoy.
the Spanish banking while, although he resists, seems doomed to continue to approve new settings and in one case or another future solution of a few entities passes through the merger. Few are those who defend the desirability of the Spanish financial system remains as it is, not so much by the number of offices and the number of entities, 15 firms, which a large group of very small entities are added, rural banks and credit unions, which between all copar not reach more than 5% market share.
for now, the People’s Bank on Thursday announced a new Macro enlargement capital by 2,500 million euros. It is his third injection of capital in three and a half years. Since late 2012, the institution that presides Angel Ron has appealed to its shareholders at 5,495 million euros directly.
Despite the efforts of People for recapitalize the market has continued distrusting their ability to digest all the brick has on its balance sheet. Hence it has decided to “take the bull by the horns,” as Angel Ron said Thursday this newspaper, and returned to claim its shareholders a new impetus to strengthen the bank. “Nobody but the market has pushed us to the capital,” added the banker.
Since People began his journey through the desert in 2012 with its first capital increase for 2,500 million (same now) the market has not stopped betting on their merger. CaixaBank has been the bank that has stalked Popular, but has not been the only, although Ron has never wanted to join the Catalan club since People would be swallowed up in the machinery of the firm presiding Isidro Faine (in fact, this entity does not participate in the placement of new securities Popular).
the president of Sabadell, Josep Oliu, sat several times with Ron to try to reach a merger agreement. The last time was between 24 to 30 September last year. But the distribution of power in the resulting bank has always been an insurmountable barrier.
Just a year ago also had informal contacts with Ibercaja and Unicaja, two former savings banks that need to go public and tell Popular as a sideman with could have been a good solution. But the hypothetical distribution of the weight of each entity in the resulting broke any possible understanding.
Now Popular intends away any possible unwanted approach of an entity given its low market capitalization. On Friday it closed with a value of 3,550 million euros.
But the runrun new merger does not go away. In the hands of the future government is the decision that Bankia swallow another public bank, BMN. This operation is also pending approval from Brussels, but it seems that neither the president of Bankia, Jose Ignacio Goirigolzarri, or some private banks such as BBVA, are in favor of the operation.
CaixaBank, while maintaining their desire to grow through mergers. These operations allow savings of 40% to 50%, say the experts. In fact, on Thursday when it reported that Criteria had to cut 40% -of current discounted 48.9% and a range of maturities and canjes-, its weight in CaixaBank by imperative ECB and if possible before the end of 2017, one of the options provided the entity is that this 9% should be disposed can be a part of an exchange for a merger.
the institution chaired by Isidro Fainé, however, will not address any hypothetical merger Spain until it completes its takeover bid for the Portuguese BIS operation that has not yet managed to untangle completely, because it still does not control political rights by 46% which now has the Portuguese firm.
veto still stands at 20% at the expense of the entry into force a decree of the Portuguese Government and the other shareholders approve. This is, in any case, the only cross-border corporate transaction that is drawn on the horizon as much as supervisors claim pan-European mergers.
And while the unknowns about who could marry whom are cleared, the banking business it will languish, burned by some negative interest rates, which seems to be a long season in Europe. BBVA’s chairman, Francisco González, was very graphic on Tuesday at a conference of the Institute of International Finance (IIF) held in Madrid. The banker said that “negative interest rates are killing us” (in relation to the bank).
The CEO of Bankinter, Maria Dolores Dancausa, has also warned of this measure. In the presentation of results of the bank he said that banks will not hold much longer low rates. Financial institutions are “not prepared” to cope much longer to an environment of rates as low interest and could still last a couple of years, he says.
In one year (2014 2015) Net interest income of the whole sector fell by 2.6%, and the yield rose from 5.15% to fall again to 4.29%. Financial revenues have collapsed by 70% from 2008 to 2015, according to a study by International Financial Analyst (AFI).
Instead, the turnover on employee has passed since 2013 of 14.6 million euros to 15.3 million today. This growth is due to the adjustments made by banks and still. Since the crisis erupted in 2008, the sector has reduced staff by 27%, reaching the end of last year to 197,830. The branch network has also been reduced by 32%, to also add to December last year 30,921 branches. And the trickle of closures and adjustments follows. Santander will close this year 450 branches and lay off (including early retirement) to 1,380 employees.
Liberbank also negotiates an ERE with early retirements affecting about 1,500 employees (500 of them correspond to the plan launched last year) and Ceiss signed two weeks ago off up to 850 employees.
Further adjustments that occur in parallel to the career of banking digitalized, what the BCE_ve an opportunity to continue cutting costs and industry begins to understand that it is an obligation if you do not want to lose the battle against powerful competition from Fintech, the new financial firms technological stamp.
with all these fronts, responsible for supervision of the ECB has no hesitated to remind the industry that must not lose sight of their original sin, brick. “It is time to clean the balance sheets,” ordered Nouy in the IIF forum.
Although the creation of SAREB, the so-called bad bank, in 2012 discharged the rescued entities and assisted with public money thickness its toxic burden, the financial sector considered “healthy” still carries a major real estate slab. Alone among the six largest financial institutions in the country still saddled with 123,000 million in nonperforming assets, of which 68,000 million are foreclosed properties and other problem loans to promoter.
In fact, expanding Capital announced by Banco Popular has a lot to do with the burden suffered by the huge burden of non-performing assets on balance inherited bursting of the housing bubble. With 34.000 million euros, Popular is the entity with more toxic burden and higher real risk as their coverage, 38% is the lowest of the big Spanish banks. Of the total, 14.550 million are real, provisioned at 40%, and loan balance.
The primary objective of the capital increase is to raise coverage to 50% and accelerate the sale of assets to free up capital trying not to incur losses. A work bilge in which remains focused the entire sector, with greater or lesser ease depending on the volume of provisions already made, and which may require new life.
An irregular and tense terrain, ultimately , which is offered to the bench to start the vaunted new dance fusions that everyone talks about but no one seems willing to start
SPAIN. the banking travels to its concentration
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