Barcelona-based CaixaBank buys Banca Cívica for €1 billion and becomes Spain’s largest bank

Barcelona (ACN).- The Catalan CaixaBank will buy Banca Cívica, after the latter accepted an offer of €1.97 per share. On Monday the boards of the four savings banks forming Banca Cívica (Caja Navarra, Caja Canaria, Caja de Burgos, and Cajasol) ratified the purchase agreement, with a price 11.26% below the €2.22 paid on Friday on the stock exchange. Therefore, after having confirmed CaixaBank’s interest to buy Banca Cívica, the main Catalan bank will finally buy the other for €977 million. With this operation, the Barcelona-based financial giant CaixaBank will become Spain’s largest bank with more than €342.6 billion in assets in the domestic market, resulting from merging CaixaBank’s €270.43 billion in assets with Banca Cívica’s €72.19 billion. In the Spanish market, CaixaBank will be bigger than BBVA (currently the main bank after buying Unnim) and Banco Santander, two giants on world stage. CaixaBank’s operation was confirmed just 5 days before the Bank of Spain’s deadline given to the sector to clarify their plans. Three main issues remain to be solved in the next few days in Spain’s banking system: what will happen with Bankia, who will buy CatalunyaCaixa and who will buy NovaCaixaGalicia? Past rumours had been pointing to a merger between CaixaBank and Bankia, an operation denied in February by the banks’ presidents  and that now seems definitely ruled out.

On Monday, anticipating the operation’s confirmation, the Spanish Stock Market Regulator (CNMV) temporarily suspended CaixaBank and Banca Cívica’s trading. Last Thursday, CaixaBank presented its final offer, €1.97 per share. On Friday, Banca Cívica shares dropped by 6.33% on the stock exchange, falling to €2.22 per share.

Despite having a core capital of 9.5% Banca Cívica had great difficulties to meet the new requirements for additional provisions, higher than €2 billion. In this context, the platform grouping the four savings banks Caja Navarra (based in Pamplona), Caja Canarias (based in Santa Cruz de Tenerife), Caja de Burgos (based in Burgos) and Cajasol (based in Seville) was looking to join a larger group or participate in a merger.