Spanish banks limp into home stretch 21 Oct 2013 The country’s lenders have already set aside nearly 190 billion euros in provisions for dud loans. Even though they may still need another 45 billion euros as bad debts climb, this should be manageable. The wheels will only properly come off if Spain’s economy stagnates.
BBVA makes painful withdrawal from Chinese bank 17 Oct 2013 The Spanish lender cites new capital rules for selling a third of its 15 percent stake in China’s CITIC Bank. Yet the 2.4 billion euro boost to capital hardly sugarcoats a 2.3 billion writedown. Basel may have provided a graceful way to edge away from a poor investment.
Spain’s tax system is an unnecessary mess 11 Oct 2013 The country collects less tax as a share of GDP than the EU average, despite having higher headline rates. Improving the tax system is a key reform which is sitting on the government’s desk. Without a big change, Spain will keep struggling to get its finances under control.
Santander believes in Spain again 8 Oct 2013 The Spanish bank is doubling up on consumers in its crisis-hit home country by buying a majority stake in the consumer finance arm of retailer El Corte Ingles. It might seem risky, but Santander gets access to 10.5 million new clients and a goldmine of data for a modest price.
Turning back clock won’t help Spain’s crazy hours 7 Oct 2013 Spain is in the wrong time zone, according to maps and a recent parliamentary report. But a mere change of schedule can’t make Madrid work like London. The late, long lunch break is a more significant productivity-sapping Spanish peculiarity - which cannot be changed by decree.
Investors rightly shrug off Catalonia’s separatism 1 Oct 2013 Catalan independence has become a hot political topic in Madrid, yet investors are ignoring the region’s threat. They bet that reason will prevail over parochialism, considering the hurdles to full-blown independence. For now Spain’s fragile recovery is a more pressing concern.
Telefonica set to call the shots in Italy 24 Sep 2013 The Spanish group is raising its stake in the company that controls Telecom Italia. This should break the deadlock over the indebted Italian operator, and prompt a breakup of TI’s Brazilian arm. A sale would help cut debt at TI - and strengthen Telefonica’s position in Brazil.
Santander gets "board diversity" all wrong 18 Sep 2013 The Spanish lender has appointed Rodrigo Rato to sit on its international advisory board. The ex-Bankia chairman may yet escape legal censure for the savings bank’s collapse. But the point of these sinecures is to give banks good PR, not make them look silly.
Spanish banks can use some accounting finesse 17 Sep 2013 Madrid might allow the country’s lenders to use deferred tax assets to plug part of their capital hole. It’s partly justified, and Spain would not be the first country in Europe to deploy such creativity. Yet even if the banks get their way, their capital woes aren’t over.
Repsol’s Gas Natural sale shows Caixa the exit 13 Sep 2013 Repsol might shed its 30 percent holding in Gas Natural, the Spanish utility. The stake never made much sense. The sale would dilute the oil group’s relationship with its largest shareholder, Caixabank. Parting ways makes sense for all involved.
Italy deserves the markets’ Spanish treatment 11 Sep 2013 The political chaos created by Silvio Berlusconi has pushed Italian bond yields above Spain’s for the first time in over a year. But that’s only part of the problem. Italy is losing ground on reforms and competitiveness. Without a strong government, it will keep declining.
Sabadell capital hike puts heat on Spanish peers 10 Sep 2013 The lender is raising up to 1.4 billion euros to bolster its balance sheet ahead of tighter regulatory demands. Sabadell looked especially weak, but other Spanish banks face similar questions about the quality of their capital. They should act while investors have the appetite.
Spanish property market is back from the dead 6 Sep 2013 Madrid is crawling with private equity funds looking for bargains and a few are clinching deals. But don’t expect the floodgates to open - buyers won’t return in earnest until job creation resumes and banks recognise more property losses.
Bale-in at Real Madrid won’t lead to bailout 2 Sep 2013 The Spanish soccer club is splashing out 100 mln euros on Welsh goal-scoring star Gareth Bale. The record-breaking fee stretches the spirit of financial fair play rules recently adopted by the sport. But Real Madrid’s wealth leaves the deal within the letter of the law.
Dividend cut would help Santander and BBVA 31 Jul 2013 The regulator wants to limit payouts to 25 pct of 2013 earnings. That might sound superfluous for the top two Spanish banks, which should gain from a stronger domestic economy and lower provisions. But it’s sensible to hoard capital ahead of next year’s euro zone banking union.
Spain moves steadily towards a slow recovery 30 Jul 2013 GDP hardly shrank at all in the second quarter. A 0.1 percent decline signals the end of a two-year slump. But the next phase is likely to be stagnation. Sustainable strong growth requires more credit, stronger exports and a lasting cure for unemployment.
Carlos Slim needs more than pique to stop KPN 24 Jul 2013 The biggest investor in the Dutch telco has failed to bless its $11 bln German selloff. That’s awkward. Whether strategic or financial, the depth of the Mexican mogul’s misgivings is unclear. Still, blocking the sale would be hard unless Slim can offer a sound alternative deal.
KPN’s 8.1 bln euro German retreat is at full value 23 Jul 2013 Telefonica of Spain is buying the Dutch group’s German unit, E-Plus, in a cash and shares deal equating to 9 times EBITDA. That is a big multiple by the depressed standards of European mobile. KPN is getting a large slice of the deal’s hefty synergies.
Linking German arms of Telefonica and KPN is sound 22 Jul 2013 Merging the German units of the Spanish and Dutch mobile giants would create a 16 bln euro business, yielding 4 bln euros of synergies. The market is tough, a spectrum auction looms, and neither parent is financially strong. Provided Brussels isn’t too harsh, it makes good sense.
Berlin should sit tight on Commerzbank 16 Jul 2013 The German government is reportedly mulling a quick sale of its remaining 17 pct stake in the country’s second-largest bank. Getting a strong auction going now will be arduous. There’s no need to exit. Berlin should hold off until there’s more progress in Commerz’s turnaround.