Spain’s CaixaBank climbs on stock exchange debut

Spanish savings giant La Caixa’s newly created retail banking arm, CaixaBank, listed Friday and got a double-dose of good news — a share price rise and credit rating upgrades.

CaixaBank shares rose 0.39 percent to 4.832 euros, coming off early highs on its first trading day on the Madrid Stock Exchange which was up 0.28 percent.

Moody’s Investors Service and Standard and Poor’s greeted the listing by upgrading CaixaBank’s long-term rating.

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 ($11.7 billion).

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.

Moody’s raised CaixaBank’s credit rating by three points to a high quality Aa2 from A2 while S&P hiked its rating by a notch to A-plus from A.

“The stronger credit profile of CaixaBank versus the former La Caixa is further reinforced by the fact that La Caixa will not transfer to CaixaBank its portfolio of real estate assets,” Moody’s said.

“Moreover, moving to a commercial bank status allows CaixaBank to access equity capital markets and to be subject to market discipline,” the New York-based agency said.

Moody’s assigned CaixaBank a bank financial strength rating of B-minus, indicating a “solid” liquidity position.

S&P said its rating was underpinned by CaixaBank’s “robust domestic banking franchise, successful strategy, strong liquidity, more contained credit risk profile than peers and adequate capitalization.”

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 to 10 percent if they are unlisted.

CaixaBank boasts a core capital ratio of 11 percent.