Jumat, 22 Februari 2013

CatalunyaBanc and NCG will have losses of about 20,000 million

The European Commission has made public non-confidential versions of the Catalunya Banc and NCG bank restructuring plans. Plans include huge losses to both entities in 2012, which would add some 20 billion before taxes, and a progressive entry into profitability since then. Investors in preference of both will not receive money in cash, but it will become shareholders of these banks, according to confirm plans.

Catalunya Banc restructuring plan expected a loss before taxes of 11,000 to 12,000 million for 2012. The entity will continue to suffer losses of 100 to 200 million this year and next and the forecast is that he achieves benefits of 200 to 300 million in 2015 and 2016, by up to 60% - 70% efficiency ratio improved.

In the case of NCG bench, rêve plan a loss before taxes of about 8,000 million in 2012, benefits of 10-20 million this year, which would grow to 200-300 million in 2016 and 2017, year in which the efficiency ratio would be of 50% - 60%, according to plans approved by Brussels, part of whose content has today published previously printed edition of Expansion.

Catalunya Banc and NCG Bank "face important operational challenges coming mainly from the expansion undertaken by each of the founding of savings banks", point out its restructuring plans. That expansion has been a strong promoter sector exposure, which has elevated delinquencies, and liquidity and funding issues. In the case of NCG Bank there was also ruinous business investments and high-risk corporate operations.

The plan calls for reducing Catalunya Banc total assets of 77.049 billion at the end of 2011 up to 50,000-60,000 million by the end of 2016. The bulk of the reduction will come from the credit, which passed 50.477 million 20,000-30,000 million. The number of offices will be reduced from 1.163 to 700-800 and the employees of 7.197 at 4,000-5,000, according to the plan of reetructuracion. It will be, in addition, a bank with less exposure to the risk. Risk-weighted assets will pass 42.200 to 10,000-20,000 million.

As for NCG Bank, total assets must pass of 72.129 million from 2011 to 30,000-40,000 at end of 2017. Again, the largest reduction is on loan to customers, who have to get 47.427 to 20,000-30,000 million. The reduction of offices referred to in the plan is 1,222 to 400-500 and the template, 9842 to 3,000-4,000 employees.

The plan makes clear that founding savings banks and other current shareholders assume the complete loss of their economic and political rights in institutions. As to holders of preferred and hybrid debt, the entity repurchase them with heavy discounts on their nominal value. Then, the money paid by that repurchase shall be intended by investors to the subscription of ordinary shares, leaving no funds of the entity (except for the subordinated debt with maturity, having special treatment). The calculation of Brussels is that you between 60% and 90% of the Bank belong to the FROB and 10% - 40% remaining, investors in the case of the Catalan institution, while the FROB will have 60% to 80% and the minority, 20% to 40%, in the Galician. Existing shareholders lose everything.

The plan envisages the division of entities into two parts, one main (core) and other extinct (legacy). The main unit will be managed as if it were a viable Bank and which can be sold in the medium term, they say the plans.

In the case of CatalunyaBanc, the main unit will basically include business retail, SMEs and the public sector in Catalonia and will which can give new loans. The other unit will contain the assets and liabilities to extinguish, neatly liquidate or be sold, as the banking business outside of Catalonia (including international representation offices), the corporate banking business, the subsidiaries and the shareholdings. The standard will be selling them as fast as possible always to not generate losses. The entity has already crossed the portfolio of promoters and the bulk of his estate to the bad Bank. In addition to the sale or closure of all offices and business outside Catalonia, the plan also provides for a reduction of 10% to 20% between 2012 and 2016 for its offices and staff in its network of Catalonia and headquarters. Together with the previous settings, the end result is a reduction of 50% - 60% in offices and 40% - 50% in the template. In addition, the entity will have to sell all of its portfolio of industrial holdings (including its package in Natural Gas valued at 150 million "as soon as possible"), all its position on values of fixed income and the former headquarters of Caixa Tarragona.

At NCG Bank, the area of the unit core is restricted to business retail in Galicia, León and Asturias, which will reduce your balance between 10% and 20%, with 30% - 40% in Office settings and 20% - 30% in the template of that strategic unit. To extinguish unit includes the business in other regions, the wholesale banking and shares, you will have to sell or close, and where the setting will be greater.

Plans foresee, in both cases, the main unit or any of the entity to be sold in a competitive process. Actually, the FROB has already launched the process in the case of Catalunya Banc, although reserves the right not to sell the entity if it is considered that the offers are insufficient. If it does not succeed in buyer now or later, the Government would have to present a plan to liquidate the entity at the end of 2017. The same goes for NCG Bank, where is should "carry out a restructuring in depth of NCG activities aiming to sell it as soon as market conditions permit and a maximum of five years".

Brussels figure public aid to Catalunya Banc in the form of injection of capital and transfer of toxic assets in 13.650 billion euros, as well as warranties or guarantees other 10.760 billion. AT NCG Bank figures the don 10.352 million in direct aid and some 7,500 million in guarantees.

The Commission recognizes that since the change of management in June 2010 in Catalunya Banc there has been a turnaround strategy to improve corporate governance and control, and risk management. The plan foresees a reduction of operational costs of 500 to 600 million, a reduction of 30% - 40% from 2011. For NCG, the planned reduction is 70-80 million.

The catalan Bank should sell its shareholdings in stages, from 20% to 50% both this year as the next two. If by 2015 something don't you sell, give them low and will offer them for one euro.

NCG Bank should get rid of Banco Gallego, sell EVO and also its industrial holdings. If not you achieved it, you must sell them for one euro. NCG Bank has a 23.75% of Itinere, 8.65% of Sacyr, 5% of CLH, 10.3% of Caser and 30% of Enerfin. The entity must not only sell shares and subsidiaries, but also reduce their credit exposure to them.

Spain must report every six months the fulfilment of the conditions. In addition, entities will have a kind of Auditors (monitoring trustee) who will monitor compliance with the commitments and will have full access to all the information you need.

The plans are subject to possible changes in the event of sale of the entities at the request of the buyer.



Finance; Economic; Business



Finance; Economic; Business

Title Post: CatalunyaBanc and NCG will have losses of about 20,000 million
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