Spanish banking giant La Caixa to list banking business
Spain's biggest savings bank La Caixa announced Thursday a complex deal to list its 9.48-billion-euro retail banking operations on the market, part of a major industry shake-up.
The bank said the boards of the firms involved agreed to a deal transferring La Caixa's retail banking business into its listed investment arm, Criteria, to be known as CaixaBank.
La Caixa, with 27,000 employees, 10.5 million clients and 5,300 branches, is the giant of Spain's regional savings banks, many of them burdened with loans that turned sour when the housing bubble popped in 2008.
It would be a major event for the share market and a potent symbol of Madrid's attempts to clean up the savings banks' balance sheets by pushing them to boost core capital with private investments.
There are three major steps in the operation:
-- First, La Caixa will transfer its banking operations into its wholly owned affiliate Microbank.
-- Second, La Caixa will transfer all Microbank shares -- valued at an estimated 9.48 billion euros ($13 billion) -- into its listed investment banking arm, Criteria.
-- Third, Criteria will absorb Microbank and become a credit institution with the name CaixaBank.
The deal was approved by the boards of La Caixa, Criteria and Microbank, with the aim of creating a structure that will allow it to comply with new Spanish and international capital adequacy rules, it said in a statement released to Spain's stock market regulator.
The arrangement is subject to approval by the government and relevant authorities, the banks said.
Finance Minister Elena Salgado this week announced new, stricter rules on the level of rock-solid core capital -- equity capital and retained earnings -- that the banks will must have on their balance sheets.
All Spanish lenders will have to have a core capital level equal to 8.0 percent of total assets by September, even higher than the 7.0 percent required under tough new, international "Basel III" rules agreed last year.
The government will step in to take temporary stakes in those savings banks that do not meet the new requirements by then, she added.
La Caixa already exceeds those requirements.
As of September 30, its core capital was equal to 8.7 percent of total assets and the bank said its liquidity was among the highest of the Spanish financial system -- at 22.1 billion euros ($30 billion), "practically all of it immediately accessible."
© 2011 AFP