Lloyds buys 1.8% of Banc Sabadell by transferring its Spanish subsidiaries to the Catalan bank

Barcelona (ACN).- The Catalan Banc Sabadell bought all the shares in the Lloyds subsidiary companies in Spain, Lloyds Bank International and Lloyds Investment, and in exchange the British bank acquired 1.8% of the Catalan company’s total shares, according to a press release sent on Monday by the Spanish Stock Exchange Authority (CNMV). Banc Sabadell paid €84 million for Lloyds’ Spanish business, an amount that will be paid in stocks, giving 53.75 million (53,749,680) shares in the Catalan bank to the British banking giant. This way, Lloyds will control 1.8% of Banc Sabadell’s total shares. The agreement foresees that the UK group will become a “stable shareholder”, since Lloyds has committed to keeping the stocks for at least two years. With the operation, the Catalan bank will control the Lloyds retail and investment businesses in Spain, where the UK company has 28 branches, €1.79 billion in loans and €760 million in deposits. The operation is on the condition that they receive the green light from the corresponding domestic and European authorities, which is expected to happen within the next few days.

Banc Sabadell bought Lloyds’ retail banking business in Spain, as well as that for SMEs, private banking and investment funds. According to the CNMV, on the 31^st of December 2012, the UK group had 28 branches in Spain, €1.79 billion in loans and €760 million in client deposits.

In addition, as Banc Sabadell explained in a press release, both parts agreed to include potential compensation of up to €20 million that the Catalan Banc will pay Lloyds, depending on the 12-month interest rate for the next four years, with the concept of profitability adjustments.