MADRID: Caixabank and state-owned Bankia on Friday announced the details of a merger to create Spain’s biggest domestic bank by assets.
Following are some key figures:
FINANCIAL TERMS
– Caixabank offered 0.6845 shares for every share in Bankia, valuing the state-controlled lender at 4.3 billion euros.
– Caixabank said the all-in share deal represents a premium of 20% versus closing prices on Sept. 3 and a premium of 28% over the last three months.
– Bankia’s valuation at Thursday’s market close was 4.4 billion euros.
– Since news of the merger emerged, shares in Bankia have risen around 39.1%, while Caixabank has gained 13.7%, giving them a combined market capitalisation of 16.77 billion euros, according to Reuters calculations based on Refinitiv Eikon data.
THE NEW GROUP
– New lender will leapfrog Santander and BBVA, with more than 664 billion euros in total assets, including Caixabank’s assets in its Portuguese unit BPI.
– The new group will be named Caixabank while Bankia as a commercial brand will be dropped gradually.
– It will have 51,500 employees in Spain and 6,300 branches, the banks said, without saying how many jobs or branches would be eliminated.
– It will have more than 20 million customers and a 24% market share in deposits; 25% in loans and 29% in long-term savings products.
– Bankia’s Jose Ignacio Goirigolzarri will serve as executive chairman, but with limited powers.
– Gonzalo Gortazar, Caixabank’s CEO, will be chief executive.
– The legal headquarters will be in Valencia, while maintaining operating headquarters in Madrid and Barcelona.
GOALS AND COST SAVINGS
– The banks estimate the new group’s return on tangible equity ratio (ROTE) at more than 8% in 2022.
– They said they expected to achieve a fully loaded core Tier-1 ratio of around 11.6% in the first quarter after the transaction.
– Caixabank and Bankia aim to generate annual recurring cost savings of 770 million euros by 2023 and generate revenue synergies amounting to 290 million euros annually over a period of five years.
– Expected restructuring costs are 2.2 billion euros, which Caixabank expects to offset with a bad will, which occurs when an asset is brought below book value.
SHAREHOLDER STRUCTURE
– Caixabank will hold 74.2% of the new bank, while Bankia will have 25.8%.
– The foundation of La Caixa, through Criteria, the parent company of Caixabank, will own around 30% of the new lender. Before the merger, the foundation had 40% stake in Caixabank.
– Spain, via state bailout-fund FROB, will hold 16.1% in the combined lender, having held 61.8% in Bankia previously.
– Shareholders meetings at Caixabank and Bankia will be held in November to legally approve the deal, which lenders aim to close by the first quarter of 2021.
(Editing by Ingrid Melander, Jose Elias Rodriguez and Jason Neely)
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