Sabadell Said to Weigh Mexico, TSB Sales After BBVA Deal Fails

Banco de Sabadell SA is weighing a sale of its businesses in Mexico and the U.K. to streamline operations after an attempted takeover by Banco Bilbao Vizcaya Argentaria SA fell apart, people familiar with the matter said.

The Spanish lender has been discussing a potential sale of its Mexican unit with advisers, the people said, asking not to be identified as the information is private. It has also received expressions of interest in its U.K. arm TSB Bank Plc, the people said.

No final decisions have been made, and there’s no certainty the deliberations will lead to a disposal, the people said. A representative for Sabadell declined to comment.

Sabadell said Friday it would explore alternatives for its international operations after talks with BBVA to create Spain’s second-largest domestic lender collapsed over price. The bank, which has been selling off peripheral businesses to shore up its capital buffers, wants to refocus on retail banking in its home market.

TSB has been a drag on earnings since Sabadell acquired it from Lloyds Banking Group Plc in 2015, the year before the U.K. voted to leave the European Union. A poorly handled merger of technology platforms in 2018 led to reprimands from lawmakers after customers were unable to access services and their information was compromised.

Sabadell’s operations in the U.K., where the bank has more than 7,000 people and 485 branches, reported a net loss of 84 million euros ($100 million) in the third quarter. Net profit at its Mexico business fell about 60% during the period to 2 million euros.

Spain is setting the pace in Europe’s long-awaited banking consolidation round, with its lenders seeking deals with domestic rivals to manage the impact of negative interest rates and the coronavirus pandemic. CaixaBank SA is buying Bankia SA for about 3.8 billion euros, while Unicaja SA and Liberbank SA are in talks to form what could become Spain’s fifth-largest lender.

Sabadell has been working with Goldman Sachs Group Inc. on a range of strategic options that could include a merger, asset disposals or buying a smaller competitor, Bloomberg News has reported.

©2020 Bloomberg L.P.

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