Misc 16/11/2020

BBVA sells US subsidiary for €9.7 billion

North American financial group PNC acquires most of the bank's US business

1 min
El president del BBVA, Carlos Torres, aquest divendres a Bilbao, abans de la Junta d'Accionistes del banc.

BarcelonaBBVA has agreed with PNC Financial Services Group the sale of 100% of its subsidiary in the United States, BBVA USA Bancshares, as well as other group companies in the US for approximately €9.7 billion. On Monday the entity explained that the agreement reached does not include the sale of BBVA's institutional business.

This part of the transaction will be transmitted by BBVA USA Bancshares to the bank's entities of Basque origin before the closing of the sale. Therefore, BBVA will continue to maintain the wholesale business it currently carries out through its branch in New York, the bank added.

The price of the operation, which will be paid entirely in cash as explained by the bank, is approximately 11.6 billion US dollars, the equivalent of some 9.7 billion euros.

BBVA expects that the operation announced on Monday will have a positive impact on the group's capital ratio of approximately 300 basis points and a positive result net of taxes of approximately 580 million euros. The closing of the transaction, which is subject to obtaining the authorisations of the competent authorities, is expected by mid 2021.

Stock exchange shoots up and spreads to Sabadell

BBVA's announcement has boosted its value on the Spanish stock market, which has risen by 20% and at 12:30 pm was almost 16% higher than at the opening.

Moreover, not only did BBVA's share price rise, but it also spread to the entire Spanish stock market. At 12:30pm the Ibex-35 was up almost 1.7%. The value that rose most after BBVA was Banc Sabadell, which gained more than 15%, in an interpretation by investors that within the process of consolidation of the Spanish financial system a merger between both banks would be possible.