Spain´s biggest bank Santander acquired fellow Spanish lender Banco Popular in an overnight auction on Tuesday/ Wednesday for €1 after the European Central Bank warned that Spain’s No. 6 bank by assets was on the verge of collapse.
The purchase, announced on Wednesday, means Santander will acquire 100 per cent of the struggling bank’s shares and debt. Santander also plans its own capital increase worth €7 billion to cover the absorption.
This process has been triggered by the ECB after seeing the unviable situation of the bank,’ said Spain’s Fund for Orderly Bank Restructuring (FROB).
Banco Popular’s lack of viability, it added, “is due to liquidity problems associated with the deterioration of its deposit base over recent months and the uncertainty about its own plans to face up to the possible deterioration of the bank’s balance sheet.”
Full Content: Sky News
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