Lloyds owns 1.8% of Banc Sabadell after Spanish subsidiaries deal

The Catalan Banc Sabadell bought all the shares in the Lloyds subsidiary companies in Spain, Lloyds Bank International and Lloyds Investment, and in exchange the British bank acquired 1.8% of the bank’s total shares, according to the Spanish Stock Exchange Authority CNMV.

Banc Sabadell paid €84 million for Lloyds’ Spanish business, an amount that will be paid in stocks, giving 53.75 million (53,749,680) shares in the Catalan bank to the British banking giant. This way, Lloyds will control 1.8% of Banc Sabadell’s total shares. The agreement foresees that the UK group will become a “stable shareholder”, since Lloyds has committed to keeping the stocks for at least two years. With this operation, the Catalan bank will control Lloyds’ retail and investment businesses in Spain, where the UK company has 28 branches, €1.79 billion in loans and €760 million in deposits.

Banc Sabadell bought Lloyds’ retail banking business in Spain, as well as that for SMEs, private banking and investment funds. According to the CNMV, on the 31 of December 2012, the UK group had 28 branches in Spain, €1.79 billion in loans and €760 million in client deposits.

In addition, as Banc Sabadell explained both parts agreed to include potential compensation of up to €20 million that the Catalan Banc will pay Lloyds, depending on the 12-month interest rate for the next four years, with the concept of profitability adjustments.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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