A santander é de qual banco popular

DBRS, Inc. (DBRS) has today confirmed the ratings of Banco Santander SA (Santander or the Group), including its Issuer Rating and Senior Unsecured Long-Term Debt & Deposit rating at A and Short-Term Debt & Deposits rating at R-1 (low). At the same time, Santander’s Intrinsic Assessment (IA) has been confirmed at A. This confirmation follows Santander’s acquisition of Banco Popular Español S.A. (BPE). All ratings have a Stable trend, with the exception of the subordinated debt ratings which remain Under Review with Negative Implications pending the conclusion of a wider review of European banks’ subordinated debt.

The confirmation of Santander’s IA reflects the Group’s globally diversified retail banking franchise, resilient earnings and sustained ability to generate capital through retained earnings, which contribute to its ability to acquire and integrate a sizeable franchise such as BPE. DBRS views BPE as adding significant value to Santander’s franchise in Spain, as well as in Portugal, given BPE’s competitive strength in catering to small- and medium-sized enterprises (SMEs). This rating action also considers that this acquisition will lead to Santander’s exposure to its home market of Spain increasing to about 34%, from 24% of the Group’s total assets. Furthermore, the rating confirmation considers DBRS’s view that Santander will be able to manage the issues facing BPE and limit possible customer attrition.

BPE has significant market shares in customer loans and retail deposits that reflect its position as the sixth largest bank in Spain by total assets. The acquisition therefore will notably bolster Santander’s position in its home market with its assets in Spain growing by about 46%. BPE also has a presence in Portugal, which should complement Santander Totta’s position in this market, while further expanding its reach with SMEs.

On June 7, 2017 the Single Resolution Board (SRB) took the decision to transfer all shares and capital instruments of BPE to Santander for the price of 1 EUR. The decision to initiate resolution procedings was taken with the intent to protect depositors of Banco Popular, while also contributing to financial stability. Along with the purchase, Santander announced its plans to increase capital through a rights offering of EUR 7 billion. This additional capital will be used to offset additional provisions related to BPE´s non-performing assets (NPAs). With the acquisition, Santander is planning to add EUR 8 billion to provisions for NPAs, which will improve the coverage ratio for BPE’s NPAs to 67% from 46% at end-March 2017. DBRS views this coverage ratio as higher than many of its Spanish peers.

DBRS does, however, see some challenges for Santander in restoring the confidence of BPE customers, as concerns around its very weak capital levels drove a significant decline in market capitalisation and adversely impacted credit fundamentals in recent weeks. This resulted in some loss of deposits and impacted business momentum. DBRS expects that Santander will have the capacity to overcome these headwinds, and recoup any lost deposits while reinvigorating business momentum, given the Group’s proven ability to quickly and successfully integrate sizeable acquisitions.

RATING DRIVERS

Positive rating pressure would likely be linked to continued improvement in the position of the Spanish sovereign and the operating environment in Spain.

While less likely, negative ratings pressure could arise if there is any significant adverse impact stemming from the BPE acquisition, resulting in reputational damage for Santander. Santander’s ratings could also be pressured, if the Group’s risk profile were to increase outside of current expectations, particularly within Santander’s consumer finance or wholesale banking businesses, without the appropriate increase in capitalisation. Additionally, lower earnings prospects in its international subsidiaries would likely put negative pressure on Santander’s ratings, as this would reduce the benefit of the Group’s international diversification.

Notes:
All figures are in EUR unless otherwise noted.

The applicable methodologies are the Global Methodology for Rating Banks and Banking Organisations (May 2017) and DBRS Criteria: Guarantees and Other Forms of Support (February 2017) which can be found on our website under Methodologies.

The primary sources of information used for this rating include company documents, Bank of Spain, Fondo de Restructuracion Ordenada Bancaria (FROB), Single Resolution Board (SRB), European Central Bank (ECB) and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: Lisa Kwasnowski, Senior Vice President - Global FIG Rating Committee Chair: Roger Lister, Managing Director, Chief Credit Officer, Global Financial Institutions Group and Sovereign Ratings Initial Rating Date: October 11, 2006

Last Rating Date: March 7, 2017

MADRID— Banco Santander SA has acquired Spanish rival Banco Popular Español SA in an overnight auction for the nominal amount of €1 ($1.13) after the European Central Bank determined the ailing lender was near collapse, providing a test of Europe’s banking rules enacted after the financial crisis.

The overnight rescue of Banco Popular marks a swift and decisive response by the European Union to stop the downward spiral of Spain’s most troubled big bank.

While the Spanish banking sector is largely healthy, Banco Popular has proved a weak link. The lender’s balance sheet is weighed down by around €37 billion in foreclosures and other nonperforming assets accumulated since the country’s real-estate boom went bust.

The sale of Banco Popular also marks the first major move by the Single Resolution Board, the European body charged with dealing with failing banks and ensuring that taxpayer money doesn’t go to bailing out troubled lenders.

Instead, shareholders and junior debtholders are in line for losses, along with holders of contingent convertible debt, also known as CoCos, which European authorities have encouraged banks to issue in recent years.

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Lenders across the region, including Banco Popular, have used this kind of debt to raise billions of euros of capital. The securities pay coupons like normal bonds, but convert to shares if the bank’s capital ratios sink below a certain level, thus making them the first bondholders to be wiped out in a bank failure. Analysts said the rescue could lead investors to demand greater premiums on bonds issued by European banks struggling with soured loans or low provisions.

The Single Resolution Board’s initiative in Spain follows criticism that Italy last month sidestepped Europe’s new rules by using a loophole to approve the injection of public money into troubled lender Banca Monte dei Paschi di Siena SpA.

Banco Popular has been floundering for months though in recent weeks its crisis deepened as investors became increasingly concerned it wouldn’t be able to sell assets, raise capital or find a buyer.

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Like other troubled lenders in Italy, Portugal and Greece and elsewhere in Europe, the bank hasn’t been able to generate strong enough profits to help shore up its balance sheet. Banco Popular’s share price had plummeted more than 50% in the past week alone.

The ECB had become increasingly concerned about the deterioration of Banco Popular’s finances, before determining on Tuesday “that the bank was failing or likely to fail,” according to a statement.

After recent attempts by Banco Popular to find a buyer in a private sale failed, EU banking authorities launched a rapid-fire auction Tuesday night, with Santander emerging as the buyer early Wednesday morning, Santander Executive Chairman Ana Botín said. She declined to say how many other banks were involved in the auction.

One of the banks invited to the Tuesday auction was Spain’s Banco Bilbao Vizcaya Argentaria SA,

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“Our approach is to turn the bank into a digital house, so when we look at a physical asset like Popular, we are extremely demanding on pricing,” BBVA Chairman Francisco González said at an event in Madrid. The sale, he added, was “good news from the economic point of view because there was a problem in the system and that problem was fixed.”

The rescue imposed steep losses on junior bondholders and wiped out shareholders, while senior bondholders were spared.

Banco Santander Executive Chairman Ana Botín at a media conference in Madrid on Wednesday.

Photo: Pablo Blazquez Dominguez/Getty Images

Questions remain over whether senior debtors will necessarily be off the hook in future bank rescues if a buyer isn’t found, for instance, or if the rescued lender is in worse shape than Banco Popular. “There will be occasions when senior debt will suffer,” said John Raymond,

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The transaction also spared taxpayers, fulfilling a major objective of EU banking rules that were enacted after a number of European governments used public money to shore up teetering banks during the financial crisis.

A private solution for a teetering bank “is great news for Europe,” Ms. Botín said during a news conference in Madrid. “This is a strictly private operation.” The speed with which Banco Popular was rescued belies the image of EU institutions as lumbering and inefficient, Ms. Botín said.

The assertiveness by the European authorities in the Spanish case may quiet some criticism of how they have handled the Italian banking crisis. However, it remains to be seen how the new banking regime responds to situations more complicated than that of the Banco Popular, where authorities had a financially sound buyer in Santander and the Spanish banking sector is generally in rude health.

The combination of Banco Popular and Santander creates Spain’s largest bank, with 17 million customers, leapfrogging rivals Banco Bilbao Vizcaya Argentaria SA and CaixaBank SA . Santander also acquired Banco Popular’s unit in Portugal, where Santander has a large market share. Santander, which was already one of Europe’s largest lenders, now plans to raise €7 billion in a rights issue before the end of summer to fund a cleanup of Banco Popular’s balance sheet. Santander shares closed down 0.9% in Madrid.

Santander can benefit from Banco Popular’s strong franchise in lending to Spain’s small- and medium-size businesses. Spanish banks have tried to boost their loans to small- and medium-size companies as their bread-and-butter business of selling mortgages has been less robust amid Spain’s economic recovery from a deep crisis.

Santander said the transaction is expected to generate a return on investment of 13% to 14% in 2020 and would boost earnings a share by 2019.

Santander will book €7.9 billion in provisions for Banco Popular’s nonperforming assets. That will increase coverage for real-estate assets and nonperforming loans to 69% from 45%, which was the lowest coverage ratio among major Spanish banks.

Citigroup Inc. advised Santander. Jefferies International Ltd. and Spain’s Arcano Partners advised the Spanish bank bailout fund known as FROB, which helped orchestrate the rescue.

—Julia-Ambra Verlaine and Ben Dummett contributed to this article.

Write to Jeannette Neumann at