Bankinter is confident of replicating its successful organic growth model in Portugal
The CEO of Bankinter affirms that the purchase of the retail business of Barclays will create value for the shareholders of the bank from the first year.
Bankinter will issue 200 million euros of AT1, therefore the takeover will have a neutral impact on capital ratios.
The institution expects Portugal to become the largest regional organisation of the bank and reach a 10% return on the invested capital.
The institution increases its credit portfolio by 11.3%, its assets managed off the balance sheet by 15% and its client base by 30% with this purchase.
The impact of the operation on the balance sheet of Bankinter, on its income statement and on the situation of capital and liquidity is very limited and perfectly feasible.
The CEO of Bankinter, María Dolores Dancausa considers that businesses of retail banking, private banking, business banking and life insurance banking taken over from Barclays in Portugal "constitute an excellent platform upon which to promote the internationalisation of the bank and to make good use of the enormous growth opportunities offered by the Portuguese market." According to Dancausa, this is a country that Bankinter has had in its sights for months due to its proximity and potential, with an economy that has started out on the path to recovery -GDP growth forecast at 1.6% in 2015 and 1.8% in 2016 -, and a financial system that benefits from greater margins than that of Spain and is currently in the process of consolidation and restructuring.
"This is an ideal setting in order for Bankinter to grow and attract customers, as we have already demonstrated in Spain in recent years. We consider that this transaction is going to offer Bankinter an opportunity to extend to the neighbouring country its well-tested business model, particularly in sectors in which it has proven to have greater capacities and more success, such as private banking, equity management, and personal banking, while we replicate, in Portugal, the success of our alliance with Mapfre in life insurance and pension plans", stated María Dolores Dancausa.
Bankinter arrives in Portugal with plans of growth and long-term permanence. Its aspiration is for the business of Portugal, in the medium term, to have the same impact in terms of its economy as the business in Spain, becoming the main regional organisation of the bank both with regard to income, and efficiency and return. Bankinter expects the Portuguese business to reach a return on the invested capital above 10% in 2020.
In this regard, the top executive of Bankinter emphasises that the bank is entering Portugal through a financial institution that has already been cleaned up after undertaking difficult reductions in the last two years; one which is of a feasible size, has qualified staff and a business profile and customers -strongly focused on private and corporate banking- which bear a striking resemblance to those of Bankinter. In terms of service quality and asset quality, it also is above average in the sector and among the six biggest banks in Portugal.
In key figures, the retail business of Barclays in Portugal has a credit portfolio of 4,881 million euros, 2,936 million euros in assets managed off the balance sheet, a network of 84 branches, 1000 employees and more than 185,000 customers, of which 21,300 are companies. Following on from this, the operation will enable Bankinter to increase its credit portfolio by 11.3% - up to 47,993 million euros -, its assets managed off the balance sheet by 15% - exceeding 23 billion euros - and its client base by 30%, reaching 812,000 customers. "The impact of the operation on the balance sheet of Bankinter, on its income statement and on the situation of capital and liquidity is very limited and perfectly feasible." states Dancausa, who maintains that the financial terms of the operation are favourable and they enable the creation of value for Bankinter's shareholders from the beginning of operations.
Under the purchase agreement, signed on 2 September, Bankinter will pay a multiple of 0.4 times the book value of the effectively transferred business, which is equivalent to an approximate price of 100 million euros. Furthermore, Bankinter Seguros de Vida, a company controlled in equal parts by Bankinter and Mapfre, will pay an estimated amount of 75 million euros for the Portuguese business of life insurance and pensions, constituting a PER of 5.9.
The operation, that is subject to the acquisition of the authorisation of the competent bodies and regulatory entities, is expected to close in a time frame of between 4 to 6 months, to which it is necessary to add twelve months in order to complete the integration process.