Unicaja and Liberbank will face global adjustments of $1.47 billion (€1.2 billion) to execute the merger with the aim of saving $236 million (€192 million) over three years, which would represent 20% of the costs of the combined entity, as reported by the groups in a press release this morning. In a segregated manner, the banks will allocate $664 million (€540 million) to restructuring the network, made up of 1,600 offices and more than 9,000 employees, with the aim of avoiding duplication. Likewise, they will set aside another $492 million (€400 million) in provisions to raise the coverage of non-performing assets (doubtful loans plus foreclosures) to 67%, and they will spend $246 million (€200 million) more on other adjustments, among which will be the breaking of the insurance banking alliances.
Read more on the subject and find other business news with our companion app Born2Invest.
The capital ratio will be the highest among the listed companies
The banks emphasized that, in spite of the adjustments, the bank will be left with a top-quality capital ratio (CET 1 fully loaded) of 12.4%, the highest among the listed companies and the second-highest among the companies with the lowest default ratio, at 3.8%. The generation of synergies will allow both institutions to increase their earnings per share by approximately 50% with respect to market estimates for 2023, with a return on tangible capital (ROTE) of 6%, compared to the current 3% for both institutions, respectively.
The efficiency ratio will improve by 11 percentage points, after the adjustments to be made, from 56.8% for the combined group to 55.1%, after the necessary restructuring.
The new bank, which will operate under the Unicaja brand and will be based in Malaga, will be a reference in the communities where both groups have more presence. Thus, it will have a market share measured by deposits of 31% in Asturias; 26% in Cantabria; 21% in Castile and Leon; 25% in Extremadura; 20% in Castile-La Mancha and 12% in Andalusia.
By business segments, it will account for 4.7% of customer deposits in Spain, with $82.3 billion (€67 billion), 3.3% of off-balance-sheet funds, with $23.3 billion (€19 billion), and 4.2% of loans, with $67.6 billion (€55 billion). Among them, it will accumulate 5.7% of the mortgage business; 1.9% in consumer credit with a capacity to improve of 3.8%, and, finally, 2.4% of loans to companies and SMEs, with a capacity to improve of 2.3%.
The union will create the fifth largest bank in the country in terms of asset volume, with more than 108,800 million euros, and will have 4.5 million customers in Spain.
Who will be at the helm of the bank
Regarding governance, Unicaja’s President, Manuel Azuaga, will be the Executive President of the new bank and Manuel Menéndez, from Liberbank, will be the CEO. This tandem will be reviewed in two years time, when the bank will eliminate the figure of the executive president with the departure of Azuaga, who is now 73 years old, and only one executive will remain in the group, so the continuity of Menéndez will be reassessed, as Unicaja will seek to have a man from the bank at the helm of the new entity. The equation has closed with 59.5% in favor of the Andalusian bank and 40.5% for the Asturian bank.
The Unicaja Banking Foundation, which currently has 50.8% of the Andalusian bank, will have 30% of the new group, while the Liberbank foundations (Fundación Bancaria Cajastur, Fundación Bancaria Caja Extremadura and Fundación Bancaria Caja Cantabria) will have 10%. The institutional investors will keep 14% of the new group and the rest of the investors, 47%.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in elEconomista.es, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Chainlink (LINK) with big update and new possibilities
Chainlink has released the OCR (Off-Chain Reporting) update, which can open up new data sources and generally increases performance. It...
Mazzanti manufacturer launches a STO after three equity crowdfunding campaigns
The campaign launched by Mazzanti has a duration of 60 days and has a minimum target of $964,000 (€800,000) and...
Gimme5 and Conto Lingotto enter Nexi Open, Nexi’s ecosystem for open banking
In 2020, Nexi Group reported Ebitda of $724.3 million (€601.4 million), up 2.5%, against revenues down 2.8% to around $1.25...
Why cotton futures made a new weekly chart high close
Cotton futures were higher for the week and made a new weekly chart high close once again. The weekly export...
Silver Supply Shortage: What Investors Need to Know
Precious metals received renewed interest as investment vehicles in the face of a global pandemic, as inflation-proof hedges in an...
Crypto7 days ago
Bitcoin slips back to $53,000 and major altcoins go lower on February 22nd
Biotech6 days ago
BB Biotech: Positive development in a volatile market environment
Featured7 days ago
The keys to ESG investment in 2021 in the face of growing interest and profitability
Business6 days ago
Virtual Reality (VR) mingles with team sports