MADRID, Sept 9 Spanish lender Banco Sabadell
said on Monday it would carry out a capital hike of
between 1.3 billion euros ($1.72 billion) and 1.4 billion euros
to strengthen its balance sheet and meet increasingly rigorous
The bank said it would carry out two consecutive capital
increases. The first would attract new investors through an
accelerated bookbuild worth around 650 million euros, equivalent
to 13.36 percent of Sabadell's capital.
Investment funds Colombia's Itos Holding and U.S.-based
Fintech Investments had committed to subscribe to the first
increase, Sabadell said, giving the bank the opportunity to
diversify outside recession-hit Spain after a number of domestic
Sabadell will then offer current shareholders additional
stock in the bank.
Colombian financier Jaime Gilinski will become the biggest
shareholder in Sabadell through Itos Holding following the
capital increase, a source close to the deal said.
According to a Reuters calculation based on the bank's
closing share price of 1.80 euros ($2.39), Gilinski will end up
with around 5 percent of the company.
Spanish lenders were laid low by the country's property bust
and took billions of euros of provisions last year to cover
losses on bad real estate deals to clean up their books.
Banks now face stricter regulation and higher capital
requirements since Spain's financial sector was bailed out by
international lenders last year.
"What Sabadell wants to achieve with this operation is to
bolster its balance sheet to take advantage of the business
opportunities that present themselves as Spain's economy
improves," the lender said in a statement to the stock market
Sabadell agreed in April to take over British bank Lloyds'
retail and private banking businesses in Spain and took
full control of insurer Mediterraneo Vida in May.
Consolidation is taking place across the sector as banks
seek to shore up funds and weaker banks are snapped up by
Sabadell also released a new report by consultancy Oliver
Wyman on the bank's resistance to macroeconomic headwinds, which
estimated losses on its loan portfolio of between 11.6 billion
euros and 14.3 billion euros, depending on macroeconomic
The report, dated September 6 and for the period June 2013
to December 2016, also projected that Sabadell would make losses
of between 7.4 billion euros and 8.7 billion euros on its asset
Sabadell would have a capital buffer of between 5.8 billion
euros and 2.4 billion euros.
Sabadell said the capital increase would make it one of
Europe's best capitalised banks, with a capital ratio of 11
Sabadell said Deutsche Bank and JP Morgan
Securities would guarantee the capital increase.
The new shares in Sabadell will be listed on October 8.