Hectic pace of Spanish bank deals to slow after Barclays sale

Mon Sep 1, 2014 8:48am EDT
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By Sarah White and Jesus Aguado

MADRID (Reuters) - Barclays' sale of its Spanish banking business to Caixabank looks set to mark the end of a hectic first round of consolidation in the country's finance industry as it emerges from the financial crisis.

Barcelona-based Caixabank - Spain's third-biggest lender by market value and owner of the largest bank branch network - has agreed to buy Barclays' wealth management and retail and corporate banking business in the country.

But after this 800 million euro deal, there are fewer opportunities for potential bidders for Spanish banking assets at attractive prices.

"Most of the obvious transactions that were going to be done have been done," Nomura analyst Daragh Quinn said.

Dozens of Spanish savings banks have been merged into larger peers in the wake of a property crash which left many short of capital and some in need of a 41.3-billion-euro (54 billion US dollar) European rescue in 2012.

BBVA in July beat Caixabank to buy Catalunya Banc, a bailed-out lender auctioned off by the state, while Banco Popular in June bought Citi's retail and credit card business in Spain.

A shake-up of the broader banking landscape following a health check on the industry by the European Central Bank - which is taking over as the supervisor of euro zone entities in November - could ultimately spur more deals, if weak banks are pushed to find partners.

Spanish banks are also coming under pressure to open up to outside investors, helping to improve transparency in an industry once heavily populated by unlisted savings banks.   Continued...

A Barclays sign hangs outside a branch of the bank in the City of London July 30, 2014.    REUTERS/Toby Melville