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CaixaBank Signals Exit From $1.92 Billion Erste Bank Stake

CaixaBank Signals Exit From $1.92 Billion Erste Group Stake

CaixaBank SA is considering the sale of part or all of its stake in Vienna-based Erste Group Bank AG, ending its foray into eastern European banking following its acquisition of Spanish rival Bankia SA.

Caixa said it may sell a 5.4% stake held directly in Erste, and also assess whether to settle swaps underlying another 4.5% of shares, according to a statement Thursday. A deal will depend on market conditions and the direct stake may be offered to pre-identified buyers, it said.

The full stake is valued at about 1.65 billion euros ($1.92 billion) at Thursday’s closing price for Erste shares in Vienna. CaixaBank shares declined 0.7% at 9:17 a.m. in Madrid on Friday, while Erste Bank dropped 3.7% in Vienna.

“Disposal may be seen as opportunistic with Basel IV implementation from 2023 set to reduce the favorable regulatory treatment of the stake,” Jefferies analyst Benjie Creelan-Sandford said. He noted Erste shares were about 55% higher this year through Thursday, and that under the new regulation the stake would have a higher risk weighting on CaixaBank.

Caixa earlier this year acquired smaller competitor Bankia, a deal that positioned it as the largest domestic bank in Spain. Unlike rivals Banco Santander SA and Bilbao Vizcaya Argentaria SA, both of which have huge foreign operations, Caixa only has a marginal presence outside its home market. 

The Spanish lender is part of a syndicate that groups some of the largest owners in Erste Group. The bloc’s ownership may fall to about 20% after a transaction, the Erste Foundation, which represents the syndicate, said in a separate statement.

A full disposal would boost Caixa’s common equity tier 1 capital ratio, the most closely watched measure of banks’ health, by about 15 basis points. 

Caixa has been a largely passive shareholder in the Vienna-based lender for more than a decade. Its ownership was initially part of efforts by Erste to fend off takeover attempts. 

Caixa is highly focused on retail banking, with a very small investment banking operation. The Caixa Foundation is the bank’s largest shareholder.

©2021 Bloomberg L.P.