A sign hangs on Wednesday, February 3, 2010, at a branch of Banco Santander in London, Great Britain.
Simon Dawson | Bloomberg via Getty Images
In one train, Santander Has been silent months of speculation about the loyalty to the British high street-and complicated a one-year consolidation saga in the Spanish banking sector.
On Tuesday, the largest lender in Spain announced that he was ready to buy the British High Street Lender TSB for £ 2.65 billion ($ 3.6 billion) from Catalonia Sabadell The approval is subject to an all-cash deal. The transaction will achieve a return on capital of more than 20%, which will achieve its tangible equity in Great Britain from 11% in the previous year to 16%, said Santander.
The acquisitions were the heart of the British expansion of Santander after he came onto the market in 2004 by buying Abbey National. However, the profitability of the British establishment has stalled, with the profit before taxes fell by 38% last year, the questions about Santander's long-term presence in Great Britain. An announcement for potential layoffs and 95 branch closings made the rumors little despite the frequent rejections of CEO Ana Botins.
“We never thought that the United Kingdom was very important to us,” Santander's CFO, Jose Garcia Cantera, told CNBCs “Squawk Box” on Wednesday. “It is actually the biggest record of all countries [where] We work. It is a high-quality business with low risk, predictable returns, hard currency, in Sterling, and this helps to stabilize our risk return profile. ”
He added that Great Britain “has always been a very important and central component of Santander's diversification strategy”.
The TSB acquisition is now “not only strategically sensible, as I said that Great Britain helps with our risk return profile, but is also very, very convincing financially.”
The deal could act as a defense game of Sabadell, which in 2015 only took over TSB from Lloyds and tries to stop a takeover offer of the Spanish peer Bbva. The two banks were generally closed since Sabadell rejected the original all-shame fusion offer from BBVA in May last year because it undervalued the acquisition goal.
BBVA has decided, despite a recent illness of the Spanish government, that the takeover may only be present if the two banks do not integrate their business activities for at least three years.
During this period “both units claim [must] Separate legal activity and assets as well as autonomy in the administration of their activities, ”said Spanish economist Minister Carlos Cuerpo during a press conference according to a CNBC translation.
Spanish banking competition “The hardest in Europe”
Madrid-Desen Government under Prime Minister Pedro Sanchez is dependent on parties in Sabadell's home base of Catalonia, has long rejected the deal against the concerns about the losses of jobs, and received from the European Commission against the European Commission against the merger.
“It is important that the banking sector can take place without imposing inappropriate or inappropriate obstacles,” said Olof Gill, the spokesman for the European Commission for Financial Services, according to Reuters. Spain's antitrust guard has already released the acquisition.
It remains to be seen whether the TSB sale becomes boring the appetite of BBVA, Carlos Torres Vila, to advance the Sabadell shareholders after a merger offer has been carried out.
RBC analysts found on Wednesday that Santander's takeover of TSB seems to be one final effort to convince [Sabadell]”The shareholders accept BBVA's offer during the upcoming recording period” and would probably “continue to complicate BBVA”.
“We are completely neutral in the Sabadell BBVA transaction,” Garcia Canttera told Santander to CNBC. “This is an asset that is available in one of the countries in which we work, and it is our trust, to look at all these options and to do our best for our shareholders.”
Nevertheless, he realized that the competition in Spanish banking is currently “probably the hardest in Europe” and cited the weak price for domestic mortgages.
“I don't think this will make bank business more comfortable in Spain. Probably the opposite,” said Garcia Canttera.