Spain’s CaixaBank climbs on stock exchange debut
Shares in Spanish savings giant La Caixa's newly created retail banking arm, CaixaBank, climbed Friday as they began trading after a backdoor listing on the Madrid stock exchange.
The shares rose 1.18 percent to 4.870 euros in mid-morning trade.
La Caixa, the largest savings bank operation in Spain with more than 28,000 employees and 5,300 branches, ploughed its entire retail banking operation into CaixaBank.
The La Caixa group gave its new bank a head start by siphoning off its doubtful property loans into a separate real estate branch, Servihabitat, and by assuming 8.2 billion euros ($11.9 billion) in net debt.
In a complex listing, La Caixa transferred its retail banking assets via an affiliate into its already-listed investment banking firm, Criteria. Criteria was then transformed into CaixaBank.
Spain’s regional savings banks are considered the weak link in the country’s financial system as they struggle under the weight of loans that turned sour because of the 2008 property bubble collapse.
Under new regulations requiring more robust balance sheets, the banks must raise the proportion of core capital they hold to 8.0 percent of total assets from 6.0 percent — or 10.0 percent if they are unlisted.