The signing of the SIP contract today, which will create the leading reference group in the whole of the Mediterranean Arc, takes place after the boards of directors of all four savings banks approved the document in simultaneous meetings held yesterday afternoon.

 

 

The boards of directors of the four savings banks met yesterday to approve the contract, after the pronouncement by the Executive Committee of the Bank of Spain had approved plan for integration through the SIP, presented by Caja Murcia, Caixa Penedès, Sa Nostra and Caja Granada, on Tuesday. According to the resolution by the Bank of Spain, the project presented by the four savings banks “fulfils the criteria of economic rationality and solidity that must be demanded from this kind of operation”. After obtaining the approval of the Executive Committee of the Bank of Spain, the integration project was examined and approved in turn by the Governing Committee of the Fund for Orderly Bank Restructuring (FROB), since, as announced, the plan included the subscription on the part of the FROB of preferred shares that are convertible into capital securities for a value of 915 million Euros, with the aim of reinforcing the group’s own resources.

 

The Bank of Spain notified the European Commission and the Ministry for the Economy and the Treasury of the terms of the operation, in fulfilment of the stipulations of article 9.2 of the Law 9/2009 of 26^th June on banking restructuring and the reinforcement of credit institutions’ own resources.

 

By signing the contract, the four savings banks comply with the calendar they had set for themselves which began on 2^nd June, when the boards of directors of CajaGRANADA, Caja Murcia, Caixa Penedés and Sa Nostra approved the Protocol to establish the SIP which was later signed by the presidents of the four institutions on 7^th June.

   

 

The new financial group, which totals a little over four million customers, becomes the fourth in the Spanish savings bank system in terms of its own funds, with a Core Capital of 3,855 million Euros; the fifth in terms of turnover, with just over 103,433 million; the fifth, too, in attributed results, with 228 million; the sixth in volume of assets, with 73,055 million and the fourth in number of branches, with 1,703.

 

According to the contract, the new Group will be geared towards an efficient management model enabling it to take advantage of the opportunities that exist on the market. The SIP constituted is inspired by a model of savings banks that are leaders in their markets, recognising the differential value of preserving the identity of each of the four savings banks, which will keep their corporate personality, their brand, their territorial loyalty and their retail business, as well as their own organs of government and their benevolent funds, independent. The contract stresses that “in view of the importance of the social and cultural work of the benevolent funds for the savings banks, and the importance of said work for the regions that constitute their respective natural zones, the savings banks will be fully independent in terms of the management of their respective benevolent funds”.

However, in key business and management areas homogeneous action will be set in motion to boost the Central Society, which will operate under the name of Banco Mare Nostrum.

 

 

According to the working hypotheses, the joint strategy of this alliance will allow the global results to be increased by over 30% in five years, to attain more than 600 million Euros, and assets by over 10% to attain 82,000 million Euros, according to the initial estimates. In the same way, the efficiency with ROF would reach 43% in 2015, whilst the Core Capital ratio would be positioned above 8% in the same year.

 

We should highlight the fact that the four institutions assume the reciprocal guarantee of solvency and liquidity with a mutual obligation of financial assistance of 100% of their own resources.

 

The Group’s board of directors, in which the four institutions will be represented, will have 16 members: five representing CAJAMURCIA; four representing Caixa Penedès; three representing CajaGRANADA; two representing Sa Nostra and two independent members, selected from “amongst professionals with acknowledged prestige in the financial sector”, according to the contract. The chairman of the Board of Directors will be the president of CAJAMURCIA, Carlos Egea, whilst Ricard Pagés, managing director of Caixa Penedès, will be appointed vice-chairman and Antonio Jara, president of CajaGRANADA, will be secretary. The president of Sa Nostra, Fernando Alzamora, will preside over the Auditing Committee.

 

The General Shareholders’ Meeting will be comprised of the four savings banks, in their capacity as shareholders of the Central Society, and they will have the political rights derived from their holding in the capital stock. For the correct government of the central board, in the more important agreements ballots with reinforced qualified majorities will be applied, for which 91% of the votes will be required, whilst for relevant agreements a qualified majority of 76% of the votes will be necessary.

 

CAJAMURCIA will have a 38% share in the Central Society; Caixa Penedès will have 29%; CajaGRANADA will have 19% and Sa Nostra, 14%. A revision period of 5 years has also been established for the holdings ratios. In the case of “SA NOSTRA”, if the institution improves its registers of management and productivity, it could reach a ratio of 20%, with a 6% increase. By contrast, if its registers are not positive it could decrease its initial holdings ratio by four points.

 

According to the time spans envisaged, the SIP will have to be ratified by the respective general assemblies, which are initially due to take place in September.

 

Below we attach the transcription of the declarations made by the four presidents of the savings banks on the occasion of the signing of the agreement:

 

 

“The group wishes to emphasise its desire to increase support for business, as a fundamental factor, and the increase of credit investment to generate employment and stimulate the economy of the country, within that great area of action represented by the Mediterranean Arc.

 

I should like to stress the importance of the group we have formed today, since the communities it is comprised of generate 70% of the GNP of Spain and could provide financial cover for over 30 million citizens…

 

Together we can offer the authentic social and financial dimension to the communities of the Mediterranean Arc.

Because of this, today is a day of great satisfaction as a result of the agreement that has been reached”.

 

 

“We have signed the contract for the creation of a group that will hold an outstanding position on the Spanish financial scene, but which above all will enable us, through efficient management, to be useful for businesses, families and public authorities by attending to their financing requirements.

 

The 4 savings banks that have signed the contract – leaders in their respective markets – have a great affinity and a loyalty which I am certain will facilitate their mutual task of being useful to society.”

 

 

“After the signing of the contract, a new financial operator has appeared on the savings bank scene, with unquestionable financial muscle in terms of solvency, liquidity that will be able to meet regulatory demands and improve their levels of liquidity and efficiency and enable that innate vocation of savings banks – regional loyalty – to be enhanced, because the regions grow by expanding and not by competing with a small size. You grow and compete by expanding.

 

Andalusia will place a large savings bank with an extremely significant financial potential in the Mediterranean Arc, and this will have an unquestionable repercussion for customers, businesses, entrepreneurs and investments. We have calculated a credit circulation for the 5 years of convergence of around 16,000 million Euros, so the significance of Andalusia is beyond all doubt. Our regional loyalty is unquestioned by the fact we are joining a significant, solvent group that will enable us to grow.”

 

 

“We have laid the first stone of the financial group that will be the leader within the Mediterranean Arc, something that fills me with satisfaction.

This business project has all the growth opportunities and the network we offer our customers will be the most extensive in the region, the Mediterranean Arc, offering service to over 4 million clients.

 

As well as the viability and future of this alliance, I am also deeply gratified by the fact that the union enables each of the savings banks to maintain its loyalty to its region and governing organs.

 

Our institution will maintain its headquarters in Vilafranca and its governing organs in Catalonia and we will return our profits to the closest environment through our benevolent fund.”