BBVA buys Simple, the “replace your bank” savings app, for $117m in cash…
The deal is a big win for Simple’s founders and investors, who had put a total of $15.3 million into the company. A source close to Simple tells The Verge that the company had been shopping itself around in search of a buyer, since business wasn’t progressing as quickly as it hoped. “They had kind of run out of steam,” said the source, but with a big new partner and flush with cash, perhaps Simple will find a second wind. Read more
BBVA and Santander reported deposit declines of about 1 per cent in the second quarter. While that represents a notable trend, it’s not yet one that should be called alarming.
Unless, points out Citi on Friday, you turn to the corporate and investment banking component in the deposit trend. Read more
Just one name today, but hopefully it rams home why banks are using the ECB’s three-year liquidity. From BBVA’s latest results:
Making use of the new lending facility provided by the European Central Bank (ECB), BBVA took up €11,000m at the extraordinary 36-month auction on December 21. This figure is equivalent to the sum of its wholesale debt redemptions for 2012. It means that the Group has “liquidity coverage” and demonstrates its prudence in liquidity risk management in line with the profile of maturities in upcoming years. However, it does not imply that the Group will not issue debt in 2012 if conditions improve. Read more
Spain’s new government is pressing for Bankia, a group of savings banks listed last year, to seek a merger with another Spanish bank in a deal that would create the country’s largest domestic lender by assets if it materialised, the FT says, citing unnamed bankers in Madrid. The three possible candidates are Santander, BBVA and Caixabank – the country’s biggest institutions. But the first two have remained profitable through the crisis thanks in part to their foreign investments, and their executives are wary of increasing exposure to the moribund domestic property market. The third, Caixabank in Barcelona, denied on Tuesday that it was in discussions with Bankia, in Madrid, over a possible deal. Bankia also said it was not contemplating such a merger. Spain’s economy ministry, responsible for the financial sector, reiterated the government’s call for a fresh round of bank mergers, while declining to comment directly when asked about Bankia.
Europe’s banking industry is rushing to declare whether they’ve made the EBA cuts or not.
Here’s a running list of the statements we’ve seen so far: Read more
Spain and Italy’s leading banks were the strongest performers in last week’s European stress tests, in a surprise result that could help relieve the funding pressure that had been building on them, the FT reports. The European Banking Authority, which conducted the exercise, found an aggregate capital shortfall of only €2.5bn ($3.5bn) at eight banks, prompting criticism that the tests were not tough enough, in part because they did not account for any sovereign failure even as Greece teeters on the brink of default. A ninth bank, Germany’s Landesbank Helaba, also failed but refused to disclose its result as part of the exercise. But investors who have studied the results and associated disclosures of the EBA test say the clean bill of health given to the likes of BBVA and Santander in Spain, and Italy’s Intesa Sanpaolo, could provide a timely boost. Such groups have been dragged down by sentiment towards their home countries and have experienced difficulties securing short-term finance at reasonable rates. For more on the stress tests see FT Alphaville.
It’s gone all quiet in the other letters that make up a certain eurozone peripheral acronym…
Spain and Italy have both been contenders for the next eurozone hotspot, of varying degrees. And while Spanish and Italian banks have both been rushing to raise capital or prefund in recent months, to help stave off, or prepare for, peripheral contagion, they seem to have had varied success with their efforts. Read more
Here’s one to add to the Spanish banks about to lose their loan buffers theme.
Joseph Dickerson, bank analyst at Espirito Santo and last seen on FT Alphaville quoting Woody Allen and slapping a big buy on Lloyds, reckons Santander and BBVA need additional loan loss reserves of €10bn and €6bn each. On top of that, he thinks Spanish banks have generally underprovided for real estate losses — even releasing loan loss buffers in the second-half of 2010 to help boost their bottom lines. Read more
For some months now, all the Spanish banking concern has been focused on funding and net margin issues. Worries about loan losses (so 2009) have ebbed away.
On Wednesday, Société Générale’s banking team says it’s time to revisit the issue. Read more
Breaking pre-market news on Wednesday,
- BBVA announces 9 per cent rise in full year profits, says bad debts stable — statement. Read more
Fitch seems angry.
In a Friday statement, the rating agency dealt with a recent ruling by a judge in the Spanish province of Navarra, which said that giving a mortgaged house back to a bank is sufficient to cancel mortgage debt, even if the house has negative equity (H/T mh arb). This is rather different to what normally happens in the Spanish system, with banks able to go after the assets of defaulted borrowers for up to 15 years. Read more
RBS is recommending a cautious stance on Spanish banks on Monday.
It’s nothing to do with provisioning for legacy assets or impairments, however. Read more
… in the Spanish banking sector:
Santander and BBVA, Spain’s two largest listed banks by market capitalisation, are diversifying across business areas as well as geographical regions, the FT writes. Both are putting more emphasis on the high-margin global business of wholesale and investment banking to reduce dependence on their core retail operations. Both are putting more emphasis on the high-margin global business of wholesale and investment banking to reduce dependence on their core retail operations.
Here’s one for the irony books.
Although please ONLY read on if you can easily differentiate between (A) a fun run hosted by a bank and (B) an actual run on a bank. And just to be clear … Read more
BBVA, Spain’s second-biggest listed bank, has launched a €5bn ($7bn) rights issue following a deal to buy joint control of Turkey’s Garanti Bank, the FT reports. The rights issue is the third by a big European bank since regulators’ Basel III agreement in September to toughten bank capital requirements. China Construction Bank also on Tuesday announced a $9.2bn rights issue to strengthen its capital ratios. BBVA said that it was buying 24.9% of Garanti for €4.2bn and would jointly manage the bank with Turkey’s Dogus group, a conglomerate. The Source notes that the numbers look good for BBVA, in a deal that ‘kills two birds with one stone’.
BBVA, Spain’s second-biggest listed bank, has become the latest international lender to seek to strengthen its capital base, launching a €5bn ($7bn) rights issue following a deal to buy joint control of Turkey’s Garanti Bank, the FT reports. The rights issue is the third by a big European bank since international regulators published details of a tougher capital regime, the so-called Basel III rules, in September. China Construction Bank also on Tuesday announced a $9.2bn rights issue to strengthen its capital ratios. BBVA said that it was buying 24.9 per cent of Garanti for €4.2bn and would jointly manage the bank with Turkey’s Dogus group, a conglomerate.
Banco Bilbao Vizcaya Argentaria, Spain’s second-largest bank, has agreed to buy a 24.9 per cent stake in Turkiye Garanti Bankasi for $5.8 bn, Bloomberg reports. BBVA will buy 6.3 per cent of Garanti Bankasi from Dogus Holding for $2.06 bn and an 18.6 per cent holding from General Electric for $3.78 bn, according to a filing made to regulators. The bank is looking to build a presence in Turkey’s growing economy and reduce reliance on Spain. Meanwhile the FT reports that BBVA will launch an €5bn ($6.9bn) rights issue to bolster its capital following the deal to buy joint control of Garanti Bank.
Breaking pre-market news on Tuesday,
- BP returns to profit; to review dividend policy alongside FY results in early 2011 — statement and results. Read more
It may not be the workings of an Anna Chapman-style Russian sleeper cell.
But it is a case involving suspected double-agents. In the asset management industry. Read more
Breaking pre-market news on Wednesday,
- Deutsche Bank says sales and trading activity rebounded in September — statement. Read more
The Basel III accord — complete with a new 7 per cent capital ratio requirement for banks – landed over the weekend.
Here’s how shares in Europe’s leading banks are reacting to the news on Monday morning. Charts will update live (with a 15-minute delay on the market). Read more
SocGen analysts have turned their attention to the dislocation in covered bond prices vis-a-vis secured lending rates and government bonds.
Just as BarCap noted before them, they observe how “rich” covered bonds are currently trading with respect to the other markets. Read more
Spanish banks and savings banks are pushing to join international trading networks and clearing houses to widen their fundraising options, reports the FT. Big banks including Caja Madrid and BBVA are applying to be members of LCH.Clearnet, the UK-based bond and repo clearer that launched operations for Spanish government bonds and repos this week. Santander has long belonged to LCH.Clearnet through its UK subsidiary Cater Allen, but Spain’s overall absence from international clearing systems has been an anomaly given the size of the Spanish debt market.
Breaking pre-market news on Wednesday,
- Telefónica strikes €7.5bn deal to buy Vivo from Portugal Telecom — reports. Read more
Execution Noble has updated its original stress test scenario note for Spain’s Santander and BBVA banks, this time assuming a 10 per cent haircut scenario on Spanish sovereign bonds.
While their initial “adverse scenario” assessment in March, concluded that both banks would need to raise €8bn to meet potential funding shortfalls, their latest findings now hike that figure to €11bn. Read more
“If the Spanish state has difficulty in financing itself outside Spain, then the difficulties will be even greater for those in the private sector.”
Actually the problem is that the market is now conflating the Spanish state with the private sector. Read more