Crédit Agricole stakes claim to lion's share of Bankinter
20 November 2007, Madrid - Crédit Agricole, France's second-largest bank, announced Monday that it is buying 14.99 percent of Bankinter for €809 million in a deal that values the Spanish banking group at €5.4 billion.
20 November 2007
Madrid - Crédit Agricole, France's second-largest bank, announced Monday that it is buying 14.99 percent of Bankinter for €809 million in a deal that values the Spanish banking group at €5.4 billion.
The purchase of the shares from Canary Islands-based investor Ram Bhavnani gives Crédit Agricole the largest stake in Spain's fifth-biggest lender and extends its first foray into the Spanish retail banking sector, which began after summer with the accumulation of a 4.54-percent stake. Crédit Agricole is paying Bhavnani €13.6 per share, a 13-percent premium on Bankinter's closing price on Friday.
Bankinter shares initially soared on the news, climbing as much as 14 percent to a peak of €13.7 during early trade. However, they closed down 3.57 percent at
€11.62 in a lower market after Crédit Agricole said it is not planning a full takeover bid and analysts argued that the French bank is overpaying.
Analysts noted that Crédit Agricole is paying 18 times Bankinter's estimated 2008 earnings in spite of the less than rosy outlook for the Spanish banking sector, which is likely to suffer from the current downturn in the real-estate market.
More than two-thirds of Bankinter's €36 billion loan book is made up of mortgages, while the number of past-due loans as a proportion of total loans climbed to 0.33 percent in September, up from 0.24 percent in the same month last year. It has total deposits of €22 billion and 350 retail branches.
"Bankinter is an excellent bank and for some time we've wanted to work side by side with the management team," Georges Pauget, the French lender's CEO, said.
[Copyright EL PAÍS, SL. / Ángeles Espinosa 2007]
Subject: Spanish news