THREE regional associations are fighting against inheritance and succession tax, and are planning on heading to Madrid and then to Brussels in their battle. Aragón Stop Sucesiones y Plusvalía and its counterparts in...
Banco Sabadell buys the CAM bank for a euro
BANCO Sabadell has bought the ailing CAM bank for a euro.
The largest 'rescue operation' in the financial services sector in Spain's history – even greater than the colossal Banesto case in 1994 – this is the first time a bank has been bought by a rival entity.
Catalunya-based Banco Sabadell was, itself, formed by the mergers of various banks, and will now increase in size overnight by 75 per cent.
However, the cost of 'repairing' the CAM's damaged finances will be around 5,249 million euros, paid by the Deposit Guarantee Fund.
This is funded by banks, building societies and cooperatives, which pay 0.2 per cent of the total of their customers' money held on deposit.
By paying out to get the CAM's head above water once again, the Deposit Guarantee Fund will become 100 per cent owners of the bank, after which it will pass it on to Banco Sabadell for the nominal sum of one euro.
This means the CAM bank's losses will be cancelled – these stood at 1,730 million as at September this year.
According to sources from the Fund for Ordered Bank Restructuring (FROB), there will be no need for other entities to increase their contributions in order to pay the 'rescue fee' for the CAM bank.
The FROB says a similar process will be undertaken with the Banco de Valencia and the Catalunya-based bank, UNNIM.
Chief Executive Officer of the Banco Sabadell, Josep Oliu, does not believe the entity will suffer 'substantial additional risks' in taking on the CAM, since it is a bank which will have been 'previously repaired'.
The FROB is also confident that they will manage, given the Sabadell's experience so far after merging with the Urquijo and Atlántico.
This said, the CAM has a portfolio of up to 24,000 million potential bad debts, together with customers leaving in droves and a highly-demotivated workforce.
More Legal & Finance content
SPAIN'S economic outlook has not been affected by the upheaval in Catalunya, according to the International Monetary Fund (FMI) in its recent report. Although the global organisation said on Friday that the banned...
CUSTOMERS of ING bank can use Bankia cashpoints free of charge for withdrawals of €50 or more thanks to a new deal between the two entities. A commission of 85 cents will be charged by Bankia to ING, but this will not...
NET household wealth in Spain has risen sharply in recent months, showing that the country's economic recovery is, slowly but surely, starting to filter down to the average resident. Figures published by the Bank of...