Yesterday Banco Popular presented its accounting records resulting from a merger with Banco Pastor. Ángel Ron's bank appears conscious of the Galician's situation, that includes 4.1 billion euros in loan payments due by 2013 and real estate property exposure valued at 4.9 billion.
These figures suggest that Banco Popular will need to work slowly and assiduously to clean itself up. The bank is going to make the most of efforts to increase its net assets such that credit risk coverage has risen above the sector average in Spain.
The deal is occurred at one of the least opportune times, creating considerably more financial stress than was experienced during the time leading up to Lehman. This implies that the smallest banks will struggle the most to refinance, which means that increasing in size is essential for the small players. Thanks to synergies, common cultures and managerial profits within Banco Popular, the new lender could improve upon Pastor's rations when there are slim margins during the today?s recession environment.
They will have more muscle with which to scrape together market share, and will not be left behind with respect to the savings banks who are still integrating. Banco Popular's value has decreased because, owed to its efficiency, it is becoming a good catch for some bigger lenders. This purchase is also an important defensive move to keep corporate predators at bay.