Sabadell awarded nationalized Banco Gallego at public tender
FROB still negotiating the terms of the acquisition
The Bank of Spain’s Orderly Bank Restructuring Fund (FROB) on Wednesday said it had awarded the nationalized lender Banco Gallego to Banco Sabadell.
The FROB said it deemed the offer presented by Sabadell in a public tender as the best and that it is currently negotiating the terms of the acquisition. Sources said the FROB does not intend to offer Sabadell a so-called Asset Protection Scheme for potential future losses in Banco Gallego’s loan and property portfolios.
The FROB injected 80 million euros into Banco Gallego, a unit of Novagalicia Banco that was nationalized by the FROB along with a nine-billion-euro recapitalization. If it sells the bank for one euro, as has been the case of other lenders that had been nationalized, the taxpayer will foot the entire bill for the recapitalization.
Sabadell acquired CAM, which was also nationalized, at the end of 2011 for a nominal one euro and was also granted an Asset Protection Scheme. Sabadell has extensive experience in absorbing other banks.
Portugal’s Banco Espírito Santo and Venezuela’s Banesco also presented offers for Banco Gallego.
The FROB said completion of the acquisition of Banco Gallego is also subject to the approval of the relevant national and international authorities.
Spain received a loan of about 40 billion euros from its European partners to clean up the balance sheets of banks that had come unstuck because of their exposure to the ailing real estate sector.