Banesco wins tender for nationalized NCG Banco
Venezuelan lender offered almost one billion euros for Spanish bank
The state Orderly Bank Restructuring Fund (FROB) has awarded NCG Banco to the Venezuelan lender Banesco, which posted a bid of almost one billion euros for the nationalized Spanish bank in a privatization tender, sources in the sector said Wednesday.
Banesco beat out offers from Santander, BBVA and CaixaBank, as well as the investment funds Guggenheim and JC Flower, which posted a joint bid with the Oaktree fund.
The commercial bank that emerged from the ill-fated merger of the Galician savings banks Caixanova and Caixa Galicia to form Novagalicia has received about 9 billion euros in taxpayers' money to clean up its balance sheet, which was badly hit by its exposure to the ailing real estate sector. The state has a stake of 88.33 percent in NGC Banco, but will only recover one billion euros of taxpayers' money from the deal, swelling the budget deficit by a further 8 billion.
Banesco's offer met the condition of being 200 million euros more than the second highest bid and simultaneously 50 percent higher than required to prevent the tender going into a second phase. As a foreign lender, Banesco will not be entitled to use the 2.350 billion euros in deferred tax assets NCG Banco has as capital.
Banesco was the preferred bidder of Galician premier Alberto Núñez Feijóo as it will maintain the headquarters of NCG Banco in Galicia and there will fewer layoffs than if BBVA or Santander had acquired it.
Banesco is Venezuela's largest private bank with assets of over 35 billion euros and a workforce of 14,000. It has two banks in the United States and units in Colombia, Puerto Rico, Panama and the Dominican Republic