(Finance) – The shareholders of the Spanish banking giant BBVA they have capital increase approved by overwhelming majority for the integration of the domestic rival Sabadell Bank.
With the 96% of votes in favorshareholders have given “their overwhelming support to the capital increase needed to extend our offer to Banco Sabadell shareholders,” said BBVA Chairman Carlos Torres Vila. In his speech, he said that this combination will allow the bank to acquire scale and undertake the necessary investments in technology to compete globally. Today “marks a very important stage in advancing the most attractive project in the European banking sector,” he stressed during the Extraordinary Shareholders’ Meeting in Bilbao.
The quorum for the extraordinary meeting it was equal to 70.75%reaching record levels.
Carlos Torres Vila said: “We are fully confident in the success of this transactionwhich represents a clear commitment to Spain and its SMEs. The combination with Banco Sabadell will create a stronger, more profitable bank with greater capacity to support families and businesses in their plans for the future”.
According to BBVA, this combination is positive for all stakeholders. BBVA shareholders will obtain high returns on their investment, with limited capital consumption. Banco Sabadell shareholders will receive a very attractive premium and a 16% stake in the bank resulting from the merger. In addition, everyone will benefit benefit from shareholder distribution policy of BBVA, which includes the payment of 40-50% of profits and the bank’s commitment to distribute any excess capital above 12%.
According to Carlos Torres Vila, a driving force behind BBVA’s success in recent years has been the “discipline in capital allocationconsistently driven by our focus on creating value for our shareholders.” The Chairman stressed that, over the last ten years, the bank has disinvested approximately 16 billion euros in markets where it did not have sufficient size, such as the United States or Chile, or lacked the necessary attractiveness, such as Paraguay. “These two characteristics, the size and attractiveness of the market, largely explain the profitability of the invested capital. And we have allocated part of the capital obtained from these divestments to options with greater capacity to create value, such as our franchises in Mexico, Turkey or Spain. In fact, the offer we presented to Banco Sabadell fits into this capital allocation framework,” he stressed.
After this initial stage, the offer to the shareholders of Banco Sabadell is subject to necessary regulatory approvals and acceptance of the offer by shareholders of Banco Sabadell. Once BBVA has acquired a stake in Banco Sabadell of 50.01% or more, it plans to merge it with BBVA.