BBVA: shares jump 15% on US unit sale
(CercleFinance.com) - BBVA has agreed to sell BBVA USA, its US unit, for about 11.
6 billion dollars (about 9.7 billion euros) in cash to US financial group PNC as the Spanish bank looks to focus on its core markets.
Under the transaction, which is expected to close in mid-2021, the US subsidiary is valued at 19.7 times its 2019 earnings and 1.3 times its tangible book value, as of September 2020, BBVA said.
The deal will have a positive impact on its fully loaded CET1 ratio of around 300 basis points, generating capital of 8.5 billion euros, the Madrid-based lender said.
Also, the price represents almost 50% of BBVA's current market capitalization.
"This is a very positive transaction for all sides," said BBVA Group executive chairman Carlos Torres Vila.
In the US, BBVA is a Sunbelt-based bank with over 100 billion dollars in assets and 637 branches, with leading market shares in Texas, Alabama and Arizona.
After the closing of the transaction, BBVA will be focused on its historical Spanish market, and will still be the largest financial institution in Mexico, with other franchises in Latin America. It is also the leading shareholder in Turkey's Garanti BBVA.
The share price, which has crumled over 40% year-to-date, jumped back, rising by over 15% on Monday morning, reaching the highest level since March 2020.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
6 billion dollars (about 9.7 billion euros) in cash to US financial group PNC as the Spanish bank looks to focus on its core markets.
Under the transaction, which is expected to close in mid-2021, the US subsidiary is valued at 19.7 times its 2019 earnings and 1.3 times its tangible book value, as of September 2020, BBVA said.
The deal will have a positive impact on its fully loaded CET1 ratio of around 300 basis points, generating capital of 8.5 billion euros, the Madrid-based lender said.
Also, the price represents almost 50% of BBVA's current market capitalization.
"This is a very positive transaction for all sides," said BBVA Group executive chairman Carlos Torres Vila.
In the US, BBVA is a Sunbelt-based bank with over 100 billion dollars in assets and 637 branches, with leading market shares in Texas, Alabama and Arizona.
After the closing of the transaction, BBVA will be focused on its historical Spanish market, and will still be the largest financial institution in Mexico, with other franchises in Latin America. It is also the leading shareholder in Turkey's Garanti BBVA.
The share price, which has crumled over 40% year-to-date, jumped back, rising by over 15% on Monday morning, reaching the highest level since March 2020.
Copyright (c) 2020 CercleFinance.com. All rights reserved.