Sabadell Prepares Sale Process for Asset Management Unit

(Bloomberg) -- Banco de Sabadell SA, the Spanish bank under pressure to bolster its capital, is making preparations for a potential sale of its asset management business, people familiar with the matter said.

Sabadell, which has been conducting a strategic review of the business for the past few months, is now leaning toward a sale of part or all of the unit, according to the people. A formal auction process could kick off later this autumn, the people said, asking not to be identified because the information is private.

The Spanish lender hired JPMorgan Chase & Co. earlier this year to explore options for the business including bringing in a strategic partner, a person with knowledge of the matter said in March. In June, El Confidencial newspaper reported that the plan had been shelved, citing sources it didn’t identify.

Shares of Sabadell have fallen about 32% over the past year, giving the bank a market value of 5.1 billion euros ($5.5 billion). A representative for Sabadell declined to comment.

The Alicante-based bank has come under pressure for having low levels of core capital, a measure of its ability to absorb losses. A botched information technology platform transfer at U.K. unit TSB Banking Group Plc and a protracted period of low interest rates forced the bank in July to lower its core revenue guidance for the year.

Consolidation in the asset management industry is increasing as competition from large rivals such as BlackRock Inc. and Vanguard Group cuts into margins and puts pressure on firms to seek economies of scale. Societe Generale SA is considering options for its Lyxor asset-management business, people familiar with the matter said in August. Deutsche Bank AG and UBS Group AG abandoned talks in May to combine their asset management businesses in a deal that would have created a European giant.

Sabadell Asset Management, created in 1987, had more than 16 billion euros of assets under management at the end of 2018.

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