spanish banking

Bankia has revised its bailout request.

El Pais has:

La Caixa buys Banco de Valencia SA (MCE:BVA) for 1 EUR – with 5½ bio. In state aid. The balance is 20 bio. EUR, thus the auction was not how much La Caixa should bid; but how must they have to be paid for taking over Banco de Valencia. That is AFTER the Spanish State has already taken over the bad loans. Furthermore there is a 10 year guarantee. The 5½ bio. EUR in dowry (one ugly broad!) will of course increase the public deficit in Spain. One quarter of the balance is quite some dowry!

The reason La Caixa was interested at all – and according to “sources” – the only realistic bidder is that La Caixa was very poorly represented in the Valencia area. In fact: If a solution was not found, there were NO banks in the Valencia area – ok the Sabadell, but they are still gagging on chewing on CAM.

Comment: This explains the reversal of principle, which is spitting the banks up. The simple fact there is no alternative if every day detail banking is not to be halted all together – bills can’t  be paid and nowhere to pay out salaries. But it more than anything illustrates the desperate situation of the Spanish financial system.

El País also has:

BBVA sells off pensions in Mexico for 1.24 bio. EUR to Administradora de Fondos para el Retiro Bancomer in Mexico on top of that BBVA will get .1 bio EUR.

Comment: That is more like it – getting out. Of course the bank does not admit to a different strategy; but the move should follow the trend op un-globalisation.

Just as with Donald Ducks three nephews: When you see two – you wonder what the third one is up to? In this case Santander:

El País has a month ago:

Where Santander is splitting up and selling their Mexican banking on the stock market. And Yes:


Banco Santander, S.A. (NYSE:SAN) (MCE:SAN) has suffered a reverse in multi-million USD law suit in connection with taking control of its US subsidiary, Sovereign. The court decided against the bank and suggested to the judge to set the damages to a total of 309 mio. USD in damages, expenses, fees and interest in conflict with documents submitted to National Securities and Exchange Commission. The bank appeals the decision.

Yup, just as I thought: Up to no good.

Back in Spain today El Mundo has:

The Spanish CB approves of the plans for Bankia, CatalunyaBanc, Novagalicia and Banco de Valencia.

The need for aid is now set at €37 bio. EUR – down from the former estimate 42 bio. EUR for the four banks.

The amount is a bit according to who counts what – the 5½ bio. quoted earlier is higher than both the recent and former estimate; but might include former injection of funds.

But all in all: The restructuring of the Spanish banks are following some sort of ordered plan – and to be fair quite rapidly as well.

The remaining problem is how these State losses are to be financed. Taxing consumers and wage-earners is not the best idea if the economy is not to suffer to badly. The potential tax object is the pension funds.