If something has been constant in the midst of this crisis, it has been the restructuring plans of the big brands, where regardless of their line of business or size, they have concentrated on layoffs of personnel, branch closures and exits from certain markets. The last to move in this regard is BBVA.
The bank announced on Monday its exit from the US market, after thirteen years of operating in it.
This movement is the result of the sale of BBVA’s businesses in that market to the financed services group PNC, a firm that will retain 100 percent of BBVA’s US subsidiary, after paying 11.6 billion dollars.
In a statement sent to the National Securities Market Commission (CNMV) by BBVA, it was indicated that the operation will be concentrated in mid-2021, while Carlos Torres, president of BBVA, affirmed that this movement is a “unique opportunity to divest with a valuation premium ”that It will allow them to have “greater strategic flexibility” to invest in the markets in which it is present, through an operation “at very attractive multiples, which creates value for the shareholder and generates a significant excess of capital”.
With this movement, the renowned Spanish bank affirmed that with this movement it will be able to guarantee “long-term growth” and support “economies in the recovery phase”, investing capital “profitably in the markets in which we already have a presence. ”,.
At the same time could raise shareholder remuneration, “being a relevant share buyback an attractive option at current prices ”, as stated in the aforementioned statement.
It is important to mention that during the first quarter of the year, the deterioration of the bank’s business in the United States was reflected in a negative adjustment of goodwill in this country with a total of 2,084 million euros, which was added to the forecasts of 1,433 million euros to cope with the economic crisis derives from the pandemic that affects the entire world.
The business that BBVA expects to formally sell the following year sees more than $ 100 billion in assets, 637 offices and strong positions in Texas, Alabama and Arizona.
The bank’s business in the US market closed the third quarter of the year with an accumulated profit of 115 million euros, 75.9 percent less than the previous year.
Even with this performance, once PNC takes over BBVA’s business it will become the fifth largest bank in the country by assets and one of the first in the region.
It is important to mention that the agreement reached does not include the sale of the institutional business of the BBVA group developed through its broker dealer BBVA Securities or the participation in Propel Venture Partners US Fund I, LP
The New York branch of the firm from which BBVA will continue to provide corporate and investment banking services to its large corporate and institutional clients is also not considered. Additionally, BBVA maintains a representative office in San Francisco.