BBVA’s coup d’état. The entity has sold to PNC its subsidiary in USA for around 9,700 million euros. Thus, it discards a large part of its business in the North American country and pays for its financial position and shareholders. The largest operation in the history of the bank.
“This is a great operation for all parties. PNC has recognized the enormous value of our business, our clients and our great team in the United States, who will form part of a leading financial group in the country, ”said Carlos Torres, president of BBVA. And he added: “The agreement strengthens our already solid financial position. It gives us a lot of flexibility to invest profitably in our markets “Boosting our long-term growth and supporting economies in the recovery phase – as well as increasing shareholder compensation.”
The sale is equivalent to “almost fifty% of the total market capitalization »of the bank at this time, and represents« 2.5 times the value that analysts assign to this subsidiary. The creation of value for our shareholders is very significant ”. A round business for the entity, which has been placed in recent months in the round of mergers to join Sabadell Bank. Everything adds up to the group’s strategy, which was already seen at the highest level with the Catalan-based financial firm a few months ago to explore its merger.
This sale will provide the bank with greater strategic flexibility, in every sense. To remunerate the shareholder, but also in order to invest in the markets in which it is already present, thus opening the door to undertake other types of operations (mergers and / or acquisitions) in Spain, where dance is already in progress. March. And this comes after, also, the Bank of Spain has alerted both to BBVA and Santander of its international exposure. Until September, the entity had managed to reduce your annual losses to 15 million euros, after the provisions and adjustments to goodwill – precisely in the US – made in previous quarters due to Covid-19.
The bank notes that this does not mean getting rid of all its positions in the US, since the transaction excludes the broker BBVA Securities, the New York corporate and investment banking branch, the representative office in San Francisco and the investment Propel Venture Partners. His exposure there, of course, is greatly reduced and he abandons the commercial banking business. In the country it had more than 100,000 million dollars in assets, more than 630 offices and “a leadership position in Texas, Alabama and Arizona,” as reported by the entity. Thus, with this operation the North American subsidiary is valued at 19.7 times its 2019 result.
The operation will have a positive impact on the CET1 ratio «fully loaded» of approximately 300 basis points, equivalent to 8,500 million euros of capital generation. In this way, including this positive impact, the pro-forma CET1 «fully loaded» ratio as of September 30, 2020 would reach 14.5%.