Spains third-biggest bank by market value – CaixaBank SA reached an agreement with Barclays Plc to acquire its Spanish banking operations. Barclays confirmed in an official statement the sale of its retail banking, wealth and investment management, as well as corporate banking operations located in Spain. The deal, estimated to about €800 million ($1.1 billion) in cash, is expected to help CaixaBank expand its operations as economic activity accelerates.
As CaixaBank said, the final price of the acquisition will depend on Barclays total Spanish assets at the end of 2014. Barclays said in a press release that its divisions located in Spain had €22.2 billion in assets and €20.5 billion in liabilities as of June 30th. The deal is expected to be finalised at the end of 2014 and is subject to regulatory authorities approval.
As reported by the Financial Times, the Chief Executive Officer of CaixaBank Mr. Gonzalo Gortázar Rotaeche commented on the deal: “This acquisition will enable us to enhance our personal and private banking businesses in Spain, strengthening our counselling offer to our customers, and will enable us to accelerate organic growth due to the improving economic context.”
The acquisition is to add 250 branches and 550 000 new customers to CaixaBank, along with assets estimated to €21.6 billion. This will help the bank consolidate its position as the biggest retail bank on the territory of Spain.
The deal will also be beneficial for Barclays. Chief Executive Officer Mr. Antony Jenkins has been focused on reducing expenses, trimming non-core assets and cutting jobs in order to reduce the banks dependence on its investment division to restore investors confidence.
Mr. Jenkins said in an official statement cited by Bloomberg: “I am pleased to be announcing further progress on Barclays non-core asset reductions through the transactions. We remain on track to rebalance Barclays as part of our strategy to deliver sustainable returns for our shareholders.”
CaixaBank SA lost 1.14% to trade at €4.53 per share at 08:13 GMT, marking a one year change of +61.07%. The lender is valued at €25.63 billion. According to the Financial Times, the 20 analysts offering 12-month price targets for CaixaBank SA have a median target of €4.85, with a high estimate of €5.70 and a low estimate of €3.52. The median estimate represents a 5.87% increase from the previous close of €4.58.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
