MADRID: Spain’s economy minister said yesterday he would not be pushed into selling two nationalised banks too quickly or too cheaply as bankers press the government to act to resolve the lingering problems of its financial system.
Bankers say that Spain must pump more funds into some of the lenders it bailed out last year using EU aid and its own money if it hopes to sell them soon, with the government’s options for recovering some of the investment narrowing.
A recent government-commissioned report on the sector by investment bank Nomura and consultancy McKinsey suggested quickly selling Catalunya Banc and NCG Banco before their assets deteriorate further, two banking sources said.
Economy Minister Luis de Guindos said on Monday that the government was exploring all options for the sale of the two banks, although he said there was no rush.
“The buyers always try to give the impression that things are worth less than what they are... We are convinced that these entities have value,” de Guindos told COPE radio yesterday.
“We have to do it at the right moment and the process must be competitive... We have five years to do it, there’s no need to rush. I know there are some that want it to go quickly.”
Barcelona-based Catalunya Banc and NCG Banco, from the northern region of Galicia, together worth less than 10 percent of the Spanish market, were among the biggest recipients of the ¤41bn ($55bn) Madrid took from Brussels in aid last year.
Fernando Restoy, deputy head of Spain’s central bank, opened the door on Friday to an asset protection scheme to speed up the sale of the banks, although he repeated the government’s view that they do not need more capital.
Bankers say potential bidders are demanding guarantees against losses, or more capital, even though the banks are now mostly cleansed of the soured property assets that nearly felled them.
But pumping extra funds into the banks would hinder Spain’s attempts to slash its deficit in a prolonged recession, as it faces public anger over deep public spending cuts.
Reuters
