Sabadell will wind up with the Caja de Ahorros del Mediterráneo (CAM). Spain´s Fund for Orderly Bank Restructuring (known as the Frob) decided yesterday to sell it to Sabadell, which is a lender managed by José Oliu, who will have to pay out a symbolic amount of one euro.
The rest of the financial system will bear 80% of the costs associated with the deal. The Frob decided to structure the sale through the Guarantee of Deposits Fund (FGD following the Spanish acronym), who will be responsible for taking 10% of the CAM through a subscription of one or several capital campaigns for a grant total of 5.249 billion euros.
The FGD is fed by provisions from banks, savings banks and credit cooperatives, and it currently carries a balance of 6.593 billion euros.
This figure includes the 2.8 billion euros that the Frob injected during the intervention and is now the FGD?s burden.
In a basic communication, the Frob indicated that the Protection Plan (Esquema de Protección, or EPA in Spanish) will be responsible for "a portfolio of predetermined shares" that will assume 80% of the losses incurred in this portfolio over 10 years once provisions of some 4 billion euros in problematic real estate assets have been absorbed.
