BBVA announced a surprise purchase of Unnim. It won the bid as Ibercaja and Popular lost out despite being early favorites. BBVA made the best offer to the Bank of Spain and will receive initial aid payments of 953 million euros after paying a symbolic one euro down payment.
This is the money that the Fund of Guaranteed Deposits (FGD) will pump into the group before the shares are transferred instead of public money being injected through the Frob in the first round of mergers and after nationalization. But this won't be the only stimulus that BBVA will receive for taking on Unnim?s losses.
The Bilbao group will make available a Share Protection Plan that will cover 80% of the debt over the course of the next ten years, less the provisions already in their portfolio, for exposure greater than 7 billion euros. Deposits are greater than 1.3 billion euros. According to sources familiar with the deal, the guarantee fund will be filled with around 4.8 billion euros. BBVA will risk 1.2 billion of their own assets in the purchase.
Still, it is expected that these figures will be less. According to KPMG, the adviser contracted to supervise the deal, total losses will amount to 2.635 billion euros, because the costs of FGD will end up being around 2 billion euros. The rest of this amount will be paid out to BBVA.
BBVA won the bid and decided to bet big on Unnim despite the risk of not winning other deals, because it was clear whether they would receive funding for these deals. Further, BBVA has wanted to expand in the Catalonia market for some time. The main focus will be in the savings banks Terrassa, Sabadell and Manlleu.