* Catalunya Banc sale in early 2013
* Followed by NovaGalicia Banco
* Bankia too big to be sold in short term
By Jesús Aguado and Sonya Dowsett
MADRID, Nov 29 Spain is moving ahead with the
sale of nationalised banks Catalunya Banc and NovaGalicia Banco,
hoping to sell the Barcelona-based former savings bank early
next year and its Galician peer shortly after.
Catalunya Banc, NovaGalicia Banco and Bankia must
shrink their balance sheets by more than half, slash jobs and
enforce losses on bondholders as a condition of receiving nearly
40 billion euros ($52 billion) of European aid alongside smaller
bank Banco de Valencia.
Catalunya Banc will likely be sold in the first months of
2013, Economy Minister Luis de Guindos told a news conference on
Thursday. The sale of NovaGalicia Banco will follow shortly
after, a Bank of Spain source said.
"The sales process for Catalunya Banc has already started,"
the source said. "The auction process is expected to last around
three months and then NovaGalicia Banco will follow."
Banco de Valencia has been sold off in a fire sale to
Spanish bank Caixabank to avoid the cost of winding
down the small lender, brought low by years of unsustainable
lending during a property boom.
Bankia, taken over by the state in May in Spain's biggest
ever bank rescue, can survive on its own after a 18 billion euro
capital injection from Europe, the Bank of Spain source said,
and any sale is likely to come years down the line.
"Bankia is different because it's a systemic bank, it can
stand alone and it's not necessary to sell it in the short
term," the source said.
Bankia could even be sold via an initial public offering
(IPO) once it has been cleaned up and its problem real estate
assets transferred to a central 'bad bank' being set up by the
government as a condition of the European aid, bankers said.
In July 2011 Bankia attempted an IPO to solve its debt
problem but it left thousands of retail investors out of pocket
the following May after the state takeover caused the stock to
lose more than half its value.
One Madrid-based banker advising potential suitors on the
sales said the large listed banks were likely to be the only
bidders for the two former savings banks.
Spain's healthy banks can increase market share by buying
the pared-down lenders, stripped of their soured property assets
and with greatly reduced staff after the Europe-enforced
"The big Spanish banks will be the ones involved. There has
been some private equity interest, but they will be unlikely to
buy," he said.
Banco de Valencia was sold to Caixabank with a loss
protection scheme, but these advantages will not be offered to
potential buyers of Catalunya Banc and NovaGalicia Banco, the
Banco de Valencia, around a third of the size of the other
two banks, was sold in firesale process that didn't give bidders
time to study the balance sheet, meaning it needed a protection
scheme to seal the deal, the source said.
However, the Madrid-based banker said the government would
have trouble selling the two former savings banks without
additional loss protection.
"If they expect to do these kinds of deals they have to
offer loss protection schemes. There's no other way to sell
these assets," he said.