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Spanish banks present takeover bids on Unnim

Published on Feb. 22, 2012

Spanish banks present takeover bids on Unnim

Santander, BBVA, Popular e Ibercaja presented this Tuesday to the Banco de España their binding takeover bids over Unnim while Bankia and JC Flowers rejected bidding.

The banks interested in the acquisition of Unnim are evaluating the Protection Assets Scheme to cushion losses, which would be fueled by the resources of the Bank Deposit Guarantee Fund, that would benefit the potential buyer of the entity.

The most appealing entities to take over Unnim appear to be Banco Popular, which wants to increase their size and get ahead Banco Sabadell, and BBVA, which wants to gain presence in Cataluña. On the other hand, Ibercaja, even if they have been showing their interest in Unnim since a while ago, seems to have other projects in mind like the purchase of Banca Cívica. Also Banco Santander made their bid, but Unnim seems to have a small assets volume to interest the entity presided by Emilio Botín.

Considering the Government´s new financial reform, the entity taking over Unnim would have resources to face eventual losses and an extra year margin to achieve the reorganization demands of the Spanish Royal Order passed last February 3rd.

Unnim losses reached 107 million euros last 2011’s third quarter due to the real estate and loan portfolio worsening and fusion costs. On the other hand, the strength of the entity is their insurance business, which provided a 37 million euro net outcome in 2011, plus other 15 million euros obtained from the commissions of the insurance contracts sold. Also, their Corporate and Private Banking segment closed 2011 with 1.927 million euros in total administrative resources, which means a 4% (68 million euros) increase from 2010.

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