BBVA starts the sale of your depository business, the subsidiary that manages more than 73,000 million euros in funds and pension plans Of the entity. As financial sources have indicated to ‘El Periódico de España’, the entity has contracted with Deloitte to launch a formal sales process, which is still in an early stage. The depository of BBVA It is the third largest in the country and is valued at around 500 million euros, as indicated by the same sources. This is one of the most anticipated operations in the banking sector since the end of last year and has attracted the interest of large companies in the sector such as the American State Street Partners, the French BNP Paribas or the Spanish Cecabank. If all goes according to plan, the transaction will close over the next year.
At the end of last year, the BBVA depositary managed 39,452 million euros in pension funds, 15,998 million in private plans, 11,848 million in employment plans, 2,935 million in sicav and 3,013 million in EPSV. Together with Bankinter, BBVA is the only bank in Spain that still maintains the depository activity within your business. At an international level, almost all surrounding countries such as the United Kingdom or Italy transferred this line of activity to independent entities or investors specialized in this matter in order to avoid conflicts of interest while financial entities obtain capital gains with these divestments, they reinforce their capital and focus on their specific retail banking oriented business.
The first in Spain to separate its depository business was Caixabank, which in 2012 transferred this activity to Cecabank, one of the entities that has benefited the most from the banks leaving this business. At the end of last year, Cecabank managed 152,963 million euros after closing the acquisition of the Bankia and Kutxabank subsidiaries in 2020. This entity also manages the funds and pension plans of other banks such as Ibercaja, Unicaja, Abanca or Liberbank, among others . Behind Cecabank, the second in Spain is Caceis and was born last year from the integration of the depository and custody businesses of Santander and Credit Agricóle, with more than 86,000 million euros managed. Behind BBVA is BNP Paribas, which also took advantage of the outsourcing of these services from banks to buy the Sabadell business.
This transaction comes at a time when the entity chaired by Carlos Torres has triggered its mergers and acquisitions (M&A) activity. Just 15 days ago, BBVA informed the market that it had launched a takeover bid to control the half of the Turkish bank Garanti that it still did not control, in an operation valued at around 2,250 million euros. This transaction greatly surprised investors and the entity’s share has fallen 23% (yesterday it closed at 4.77 euros per share) since the transaction was announced. Its CEO, Onur Genç, reiterated this week that their intention with the purchase of 100% of Garanti is to generate more value and that they are committed to shareholder profitability, in the face of critical voices that warn that the transaction increases risk and bank volatility. However, two weeks ago the bank announced an improvement in shareholder remuneration, going from distributing between 35 and 40% of profit to 40-50% during the 2021-2024 period.
The experts consulted by this newspaper indicate that the reaction in the markets responds to a punishment for dedicating those resources to a country with greater risk like Turkey instead of prioritizing other growth alternatives in Spain, such as the merger with Sabadell whose negotiations were broken on the last year. Financial sources indicate, however, that the merger with the Catalan entity continues not to be ruled out in the medium term. In any case, the great catalyst for BBVA’s investment drive was the sale last year, which was completed this summer, of its business in the United States after 16 years working in the country. Specifically, they transferred BBVA USA to the PNC group for 11,600 million dollars (10,261 million euros, at the current exchange rate), generating capital gains of 580 million euros for the Spanish entity. The amount obtained is equivalent to just over a third of the market value of the entity chaired by Carlos Torres.
At that time, the president of BBVA assured that the operation “gives us a lot of flexibility to invest profitably in our markets.” With this, the group will be able to boost “long-term growth” and support “economies in the recovery phase, as well as to increase shareholder remuneration”. Hours after saying these words, BBVA and Sabadell informed the stock market regulator that they were “in talks regarding a possible merger between the two entities.” Negotiations that were finally broken due to a question of price.