Patrick Atkinson, partner, PricewaterhouseCoopers in Spain comments on current M&A activity in the Spanish financial services market following the rescue of a savings bank.
The rescue of CajaSur is likely to spark a wave of mergers in the Spanish banking market as the Spanish Government pushes forward with its plans to merge those institutions to strengthen the market.
This could result in a number of attractive assets (including branch networks) coming on to the market, opening up appealing acquisition opportunities for both competitors and new entrants.
However, this ‘back to basics’ phase does not provide the only opportunity for competitors and those looking to enter the Spanish market. Many international investors are keen to acquire portfolios of distressed assets, such as books of defaulted loans; with a reduction in the book values of assets likely to prompt a pick up in this market.
A number of players in the Spanish banking market are also considering divestment of their non-financial assets in order to simplify management and improve liquidity and capital.
Spain is definitely a market to watch closely in the coming months and foreign entrants now have an excellent opportunity to get a stronger foothold in the Spanish market.
