Spanish banking group Banco Bilbao Vizcaya Argentaria (BBVA) has reached an agreement to purchase troubled lender Catalunya Banc in a transaction valued at approximately 1.2bn.
Purchased through an auction held by the Orderly Bank Restructuring Fund (known as FROB), Catalunya Banc serves 1.5 million customers and has 63bn in assets. The bank owns 25bn in retail deposits, 28bn in gross loans and manages a branch network of 773 offices.
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The acquisition is expected to boost BBVA’s Spanish loan portfolio by 14%, deposits by 23% and its customer base by 18%.
Commenting on the agreement, BBVA chairman and CEO Francisco González said: "This deal shows we are extremely confident in the current economic recovery. This acquisition is good for BBVA and for Catalunya Banc, and helps strengthen the Spanish financial system."
FROB said that the transaction with BBVA does not comprise any state-funded protection against additional losses on assets; however it includes some guarantees.
The Bilbao-based BBVA said it would deduct its offer by 267m, if it does not have clarity on how Catalunya Banc’s deferred tax assets will be treated by the Spanish tax authorities with the closure of transaction.
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By GlobalDataThe transaction is likely to conclude during the first quarter of 2015.
The Spanish government, which had pumped 12.6bn in Catalunya Banc since its nationalization in 2011, failed twice in its efforts to offload the bailed out bank.
