Spain

Oligarch’s Spanish bid is lesser of two evils

19 Mar 2019

A takeover by Mikhail Fridman’s LetterOne could leave investors in DIA with heavy losses. But supporting the management means backing a $680 mln rights issue – almost twice the supermarket’s market value. After accounting problems and profit warnings, the former looks preferable.

Cox: Really, no one else will bid for Commerzbank?

19 Mar 2019

Berlin’s blessing of M&A talks with Deutsche may scare off interlopers. But Germany’s number two offers ING, UniCredit, Santander and others a unique chance to expand in the largest euro zone economy – and perhaps eventually move their HQs to Frankfurt to gain other goodies.

Carlos Slim has upper hand in Spain property fight

14 Mar 2019

Hedge fund Polygon reckons Realia, controlled by the Mexican tycoon, uses lowball land valuations and raised capital it doesn’t need. The 800 mln euro company’s response is unconvincing. Yet unless regulators force it to change, Slim could increase his stake at a lowball price.

European telco giants are cheap for a reason

21 Feb 2019

Deutsche Telekom, Orange and Telefonica appear undervalued relative to the past five years given their rising sales, stable EBITDA margins and M&A options. But they look less of a bargain once hefty network investment needs and the possibility of low returns are taken into account.

Spain’s snap election could harden Catalan divide

15 Feb 2019

Socialist Prime Minister Pedro Sanchez called a vote after separatist parties refused to support his budget. A coalition including conservatives and far-right Vox could get more done. But the parties’ hard line on Catalan independence might cause tensions to flare again.

Santander gives bondholders a painful lesson

12 Feb 2019

The Spanish lender flouted market convention by not redeeming a subordinated bond at the first opportunity. The move wrong-footed some investors and shows that banks will put shareholders’ interests above creditors. But not all peers can afford to take such a hard-nosed approach.

Spanish banks’ capital journey is only beginning

1 Feb 2019

BBVA and Santander trade at relatively low valuations relative to their above-average returns. That’s partly justified by thin capital positions. The pair are boosting this margin of safety, but only slowly. Domestic economic and political risks mean they may have to do more.

CEO mess overshadows Santander’s stellar outlook

30 Jan 2019

The Spanish lender reported an 11.7 pct return on tangible equity last year thanks to rapid growth in Brazil. Chairwoman Ana Botin may be able to increase that to 14 pct in the medium term, if she can avoid further missteps, like the bizarre choice to hire and drop Andrea Orcel.

Context makes Santander’s Orcel fail even worse

18 Jan 2019

The Spanish bank expected UBS to honour a portion of its would-be CEO’s deferred pay. But recent executive moves at Deutsche Bank and Barclays saw new hires compensated in full. Andrea Orcel’s acceptance of a cut was a concession – making it all the odder Santander backed out.

Orcel U-turn leaves Santander with reddest face

15 Jan 2019

The Spanish bank backed out of appointing Andrea Orcel as chief executive after balking at the former UBS executive’s pay package. The Italian is left without a job, and the Swiss lender has embarrassed its client. Santander Chairman Ana Botin, though, looks rash and naive.

Spain policy paralysis sets up dangerous dynamic

21 Dec 2018

Rising support for anti-immigrant Vox makes life harder for Socialist Prime Minister Pedro Sanchez, who was already struggling to pass a budget. That’s bad news for the labour market. Growth is slowing and politicians are unable to enact reforms that might help the unemployed.

Caixabank’s new plan sets its sights suitably low

27 Nov 2018

The Spanish lender aims for a 12 pct return by 2021 if interest rates rise and a 10 pct return if they don’t. The latter is what it makes now. Having had to cut previous growth targets, boss Gonzalo Gortazar seems more worried about looking silly than boring.

Orcel heads to Santander at a good and bad time

31 Oct 2018

Third-quarter numbers show Spain’s biggest bank is growing revenue, controlling costs and generating capital. That’s a good basis for deals guru Andrea Orcel to take over as CEO. The catch is that gives him limited scope to make his mark – except in a bad way.

Spanish bank tax hit not as scary as it looks

19 Oct 2018

Shares in Spanish lenders dropped sharply after a court ruled banks may have to refund mortgage taxes. That could mean a collective hit to earnings of up to 1.5 bln euros, based on the last four years of new loans. With lending rates set to rise, that’s painful but manageable.

Cepsa prices itself to avoid IPO oily patches

2 Oct 2018

The Spanish oil group is going public at a valuation of 7-8 billion euros, the lower end of expectations. That will allow owner Mubadala to sell the required 25 percent at a premium to rival Repsol. Anything richer would have been risky among the current rush of listings.

BBVA handover is slow waltz to Santander’s tango

27 Sep 2018

The Spanish bank has said CEO Carlos Torres will succeed Francisco Gonzalez as executive chairman. The orderly transition stands in contrast to Santander’s flashy punt on UBS investment banker Andrea Orcel. A crisis in Turkey will put his relevant experience to the test.

Orcel may not need deals to keep Ana Botin happy

26 Sep 2018

The Santander chair wants her new CEO to double the bank’s share price. Andrea Orcel’s background implies he would try to do so via a blockbuster deal. But if he can increase the top line by 4.5 percent annually by 2023 and keep costs in check, he could get there organically.

Santander puts relationships first with Orcel hire

25 Sep 2018

The Spanish financial giant has appointed UBS investment banking head Andrea Orcel as its new CEO. The Italian is a long-time adviser but has no experience of running a retail lender. That matters less than his rapport with Executive Chair Ana Botin, who remains firmly in charge.

Santander’s contrarian property punt looks savvy

20 Sep 2018

The bank run by Ana Botin may pay 3 bln euros to buy back its 618-acre Madrid headquarters, which it sold a decade ago. Other banks like Goldman Sachs and Lloyds are selling their property. Yet with interest rates low and Spanish property booming, the bet could pay off.

TSB malaise is spreading at Sabadell

27 Jul 2018

The Spanish bank reported a 196 mln euro loss in the second quarter and its capital ratio sunk. Problems at UK arm TSB are not going away, a bet on Italian bonds misfired, and its domestic business is weak. The litany of woes means Sabadell’s discount to peers may widen.