The Undead

We have, on a couple of prior occasions, remarked on how the large Spanish banks were intent on stealing market share from those cajas that might find themselves debilitated by their present circumstances. The excellent Joseph Cotterill at FT Alphaville recently, quoting from something from Credit Suisse, showed us what this looks like from the point of view of the weaker party:

Banks are gradually reducing their exposure to the {construction} segment (-3.4% YoY) while Cajas continue to increase (+1.1% YoY) according to our estimates base of information released by Bank of Spain.

Combine the effects of good loans being paid off, negative new loan growth and the chronic rolling over and extending of builder and promotor debt and we have construction loans comprising an increasing proportion of the book.

Zombies by any other name.

In other news... not only first out of the gate in admitting private capital (and determined to not be relegated to the above group of victims), Banca Cívica has now announced that they will be, in short order, taking themselves public with an IPO and shoring up the dike with a 4 billion euro emission of pagarés - that curious Mediterranean form of subordinate, unsecured debt which we dealt with here earlier.

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