Of Special Interest


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18th October 2011

Barclays bid for CAM - looking for other Cajas?

A report in the Daily Telegraph suggests that Barclays is one of 8 banks that has made a first round bid for Caja de Ahorros del Mediterraneo (CAM). The Caja was taken under state ownership, restructured and now is in the process of privatisation. The report goes on to state that Barclays is at early stages of assessing three other Cajas for possible purchase including Novacaixagalicia.

Barclays is understood to have carried out a serious review of its Spanish branch network at the beginning of the year and had been expected to announce significant reductions. In May the BBC reported that the bank might be seeking acquisitions in Spain. It would seem possible, if Barclays is willing and financially able to take the long view, that instead of reducing its network it buys banking assets whilst they are cheap and achieves the economies of scale it needs for success. Purchasing CAM would more than double its penetration, approaching 5% of the Spanish market.

A major problem for regulators and would be purchasers is the opacity of the accounts from many Cajas. Whilst those rescued by the state are probably more transparent it would seem likely that some loss sharing guarantees would be sought by any would be buyers.