Spain’s Banco Popular to sell off assets


THE NEW management of Banco Popular is considering selling its credit card business ‘Wizink’ and U.S. franchise ‘TotalBank’ to boost its capital after the bank lost €137 million in the first three months of 2017.

In Banco Popular’s first results under new chairman Emilio Saracho, it set aside €500 million in quarterly provisions as it continues to clean up €37 billion of pernicious real estate assets accumulated during Spain’s fiscal crisis.

To raise funds to cover the provisions, Chief Executive Ignacio Sanchez-Asiain, who joined in April, said Popular would sell off assets outside its core banking business in Spain.

Asked whether Popular would sell off Wizink and TotalBank, Sanchez-Asiain confirmed the bank would consider offers and hoped to close the TotalBank deal this year.

‘Wizink is a very attractive asset due to its profitability and growth. That said, at the right price we could sell it,’ Sanchez-Asiain told a news conference.

Popular’s 49 per cent stake in Wizink, which it set up in 2014 with U.S. investment firm Varde Partners, is valued at around €1 billion, according to analysts at UBS.

Analysts valued Florida-based TotalBank at €400 million.

Chairman Saracho is seeking to draw a line under the management of his predecessor, Angel Ron and said last month the bank could undertake another capital hike after a €2.5 billion raise last year and consider a merger deal.

In 2016, Popular, which has undergone three leadership shake-ups since last July, posted a €3.5 billion loss, which on Friday it revised up by €130 million. The bank said it expected to return to profit this year.

In a sign of the new management’s change in strategy, Sanchez-Asiain said on Friday Popular had ‘totally abandoned’ a plan proposed by Ron to spin-off €6 billion euros of non-performing real estate assets into a separate unit.

Popular shares opened down 5 per cent but later reversed their losses and were 3 per cent higher by midday as analysts welcomed a slight reduction to its non-performing asset portfolio, the largest among Spanish banks and the prospect of asset sales.

Spain’s sixth biggest lender said net interest income – a measure of earnings on loans minus deposit costs – was €500 million, down over 9 per cent from a year ago and 3 per cent from the previous quarter – just below analyst’s forecasts.

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