1). The non-profit foundation that was the owner of this large institution transfers almost (this is crucial) all of its banking assets to its own investment holding company, Ibex 35 component Criteria;
2). In turn, Criteria passes nearly all of its portfolio - 36.5% of Gas Natural, 24% of Abertis and Aguas de Barcelona, among others - to the NGO which will continue to do what it does (it has been said that it is second in the world in size to the Bill and Melinda Gates Foundation);
3). Escaping this change of ownership will be Criteria's investments in various European, American and Asian banks and financial intermediaries;
4). Also exempt from the hassle of moving house will be all of La Caixa's non-mortgage real estate 'assets' - including repossessed shares in fallen giants Metrovacesa and Colonial and the equity-for-debt residential real estate portfolio of earlier swallowed up Caixa Girona, as well as any undesirable property-related assets that fall into their hands for up to a month following the closing of the deal.
Stated more directly, CaixaBank will be born free of all the rubble and debris that litters the path of its competition.
The contract values the new entity at a bit over 20 billion euros. Our only beef is that the public float will be a mere 19 percent - a situation which we imagine that funding necessities will correct in due course. After returning to trading at 12:30, Criteria closed up 17% on volume of 42 million shares - 13 times its 3-month average.
A couple of corrections to yesterday's piece on the same matter. Our idiot staff mathematician concluded that the caja space dropped from 50 to 30 percent of Spanish banking activity on this news. In real life, that would be 40 percent. The 10.9 percent core capital refers to Basel II calculations. Basel III would be 8 percent.
And this just in: Moody's has apparently put Criteria under revision for a possible upgrade from its present A2 classification.
----------------------------
2 Comments:
so is this the ace that the govt is trying to show? Create new banks, where only the good assets move forward from the cajas, and the bad assets stay on the old balance sheets? What will happen with the remaining "skeleton companies"? Who will assume those losses?
From an investor/shareholder, if I move to the new bank, clean of shitty assets, it sounds good.
But I am curious as to the fate of these bad assets?
In the case CaixaBank, it's the charitable foundation that is it's principal shareholder. It's that simple.
It's doubtful that this plan is applicable to all of them. La Caixa (the foundation) is big enough to absorb the junk. In the meantime, though, they'll be dishing out fewer or smaller grants. That isn't a banking problem.
Post a Comment