A plan that works

Nomura has initiated coverage of the newest listed members of the Spanish banking community - Bankia, CaixaBank and the much smaller Banca Cívica. Faithfully reporting respective ratings of 'reduce', 'neutral' and 'buy', the English-language press seems, nonetheless, to be lacking a certain amount of detail. Spanish investors, however, have not failed to note that the last of the three was assigned a target price of 4.40 euros by the Japanese brokerage. With the stock trading a touch shy of 2.30 at the time, that represents a projected upside of about 90 percent.

We congratulate the principals, led by Caja Navarra, of this fusion of ex-cajas de ahorros because - and this might be of interest to investors that give some weight to less formal information - they were the only grouping of savings banks that was not dragged, kicking and screaming, through the door that turned them into listed banks. They were the first to announce that they were going public, the first to demote the importance of their regional components behind the banner of the new bank and the first to devise a marketing plan as a reborn entity. That there was a considerable delay in coming to the market was because other cajas continued to sign on to the program - under the same conditions.

They deserve the recommendation if for nothing else than their seriousness.

Compare this admission of failure and determination to find a solution to any of the others - including Bankia, which was plagued with internal power struggles right up to its IPO date. Or NovaCaixaGalicia which can't accept that their books don't balance and whose rotating presidency plan (not to mention its unpronounceable name), meant to calm local jealousies, is a loser. Or CAM - now intervened and soon to be auctioned off by the FROB - financial arm of the provincial fiefdom of Alicante (controlled by one PP politician and one large builder), which to the moment of its death could not comprehend that the mushroom model of business practice just didn't cut it any more.

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