MADRID Dec 13 Bidders for Spain's nationalised
NCG Banco could benefit from up to 2.3 billion euros ($3.16
billion) in tax credits that count as capital if they buy the
bank, three banking sources said, though most may still ask for
extra state aid to ease the sale.
Spain's government is hoping to attract binding bids on
Monday for Galicia-based NCG, in a key test of its
ability to dispose of bailed-out lenders. The auction of another
state-rescued bank failed earlier this year.
But potential bidders, including top Spanish banks and some
foreign funds, have resisted taking on NCG Banco without any
state protection against future losses it might make, or some
Losses on soured real estate and loans left some Spanish
banks needing a 41 billion-euro rescue from Europe. Including
European aid and other state help from Spain, NCG Banco got 9
billion euros in bailout funds.
Spain's government has been trying to resists demands for
more aid to sell NCG, however. It hopes perks like the tax
credits may ease those pressure, although that is unlikely, the
banking sources familiar with the auction said.
Spain recently tweaked tax laws to allow banks to transform
part of their so-called deferred tax assets into state-backed
tax credits. Then they can still count them as core capital
under new global banking rules that come into effect in 2014.
It was unclear until now what that meant in terms of capital
for NCG Banco. The bank has 4.6 billion euros of deferred tax
assets overall, often incurred because of losses. Spain's bank
restructuring fund FROB, which owns NCG, declined to comment on
the 2.3 billion-euro figure.
Bidders may now adjust their demands for state aid
accordingly, as they ask for asset-protection schemes to cover
varying amounts of NCG's loan book.
"Everyone really has the same problems with NCG Banco," said
one banking source. Besides the health of NCG's loans, those
include compensation that may be needed for bank clients who
believe they were wrongly sold preference shares.
"In the end, it will depend on who will be a bit more
aggressive, on who is prepared to take a slightly greater risk,"
the source said.
Spain's three biggest banks, Santander, BBVA
and Caixabank, are expected to lodge bids on
Monday. Venezuela's Banesco, which has already bought a small
bank in Spain, is also circling NCG. So is U.S. financial-
services firm Guggenheim Partner.
($1 = 0.7271 euros)
(Editing by Julien Toyer)