Jump to
Banco Sabadell has rejected a €12bn takeover proposal from its larger rival BBVA, the Spanish lender said on Monday, stating the offer “significantly undervalues” Banco Sabadell’s potential and its growth prospects, and describing the offer as unsolicited.
BBVA had surprised the market last week with its bid, touting the merger’s potential to form “one of Europe’s largest and most robust financial entities”. However, Sabadell’s refusal now leaves BBVA facing the decision of whether to pursue a more contentious hostile bid, a strategy unfamiliar in Spain’s dealmaking landscape.
Sabadell, which also owns UK retail bank TSB, said that its board “firmly believes that the proposal significantly undervalues Banco Sabadell’s potential and its capacity for autonomous growth”.
It further emphasised its confidence in its growth strategy and financial objectives, stating that pursuing its “standalone strategy will create superior value for shareholders”.
BBVA responded by stating, “We regret that the board of Banco Sabadell has turned down such an attractive offer.”
For years, bankers and regulators have advocated for increased consolidation within the Spanish banking sector, arguing that it would enhance the sector’s resilience. The offer from BBVA follows failed negotiations between the two banks in 2020 during the Covid-19 pandemic, primarily due to pricing disputes.
According to analysis from the Financial Times, when BBVA launched its bid it had a market capitalisation of around €60bn, but that has fallen to €57.5bn since then. Sabadell said in a statement that “the recent material decline and volatility in the BBVA share price increases the uncertainty around the value of the proposal”.
—
UBS has reported net income for the first quarter nearly three times higher than estimates, representing its first quarterly profit since acquiring Credit Suisse.
Net income attributable to shareholders over the period stood at $1.8bn, exceeding the consensus provided by the company of $602mn and representing a significant improvement from its $1bn profit posted in the same period last year.
The bank’s wealth management division also showcased strong performance, attracting $27bn in net new assets for the first quarter, compared to $22bn in the previous quarter. However, UBS cautioned about potential impacts from lower lending, deposit volumes and interest rates in Switzerland on its wealth management business for the second quarter.
Despite facing challenges such as lower-than-expected revenues in asset management and investment banking, UBS achieved additional gross cost savings of $1bn in Q1, bringing total savings since the merger to $5bn.
The merger, orchestrated by Swiss authorities, has been seen positively by investors, driving a 40 per cent increase in UBS shares over the past year.
With its balance sheet now exceeding $1.6tn, UBS faces scrutiny from regulators concerned about systemic risk. However, the bank remains optimistic about meeting its 2024 capital return targets, including share repurchases and dividend increases.
Following the announcement, shares in Switzerland’s biggest bank jumped more than 6 per cent in early trading.
—
China’s Ping An Insurance Group, the largest Asian investor in HSBC, has reportedly voted against the reappointment of CEO Noel Quinn as a director to the bank’s board at its shareholder meeting, according to Reuters citing a source familiar with the matter.
Quinn, who has announced his intention to step down as CEO once a successor is named, had previously defeated Ping An’s efforts last year to push HSBC into spinning off its Asia business.
Despite Ping An’s opposition, Quinn was re-elected with 83.93 per cent of votes in favour and 16.07 per cent against, according to HSBC’s annual general meeting statement. Earlier reports from Bloomberg suggested that Ping An lodged a protest vote against Quinn’s leadership at the Friday meeting.
Quinn is set to continue as CEO until his successor assumes the role and has agreed to remain available through the end of his 12-month notice period, which ends on April 30 2025.
—
JPMorgan has begun a new wave of job cuts in Asia, axing at least seven investment banking positions, as reported by Bloomberg citing sources familiar with the matter.
Bloomberg’s sources said JPMorgan began implementing the cuts this week, primarily affecting personnel at vice-president and associate levels across sectors such as consumer, energy and healthcare, the sources disclosed on condition of anonymity.
The move mirrors actions taken by competitors such as Morgan Stanley, HSBC, UBS and Goldman Sachs, who have also trimmed jobs within their Asia investment banking divisions over recent years.
According to Bloomberg, the decline in deal activity in China and Hong Kong, attributed to factors including an economic slowdown and ongoing political uncertainties, has prompted these measures.
Both international and Chinese banks are feeling the squeeze as investor confidence wanes. In 2023, fees from initial public offerings in Hong Kong plummeted to their lowest levels in two decades, according to Bloomberg data.
