The BBVA, Spain’s second-largest bank, has bought the bailed-out Catalunya Banc for around €1.18 billion, which means the State will suffer an estimated €11.8 billion loss on the deal.
Catalunya Banc was receiving €12 billion of direct state assistance and also received €572 million from the FROB relating to its toxic mortgage portfolio. However, as the State only owns 66% of the bank it will only receive €783 million in the deal.
BBVA beat off competition from Santander and CaixaBank to seal the deal and amongst the advantages to be obtained by BBVA are that the purchase price was below the saving bank’s €2.6 billion in equity and Catalunya Banc has €3.5 billion in deferred tax assets.
The Catalunya Bank, the result of a merger of Caixa Catalunya, Caixa Tarragona and Caixa Manresa, sustained huge losses through irresponsible policies and went bankrupt. It was further embroiled in controversy when its former president Adolf Todó received a compensation package of €600,000 when he left the failed lender and a pension scheme that could net him €4 million.
For State read taxpayer, as usual.