Banco Popular fails and is bought by Santander..blink and you missed it!

EVEN a bank failure can be presented as a triumph. This week Banco Popular, a big Spanish lender, endured a run. Depositors were said to be withdrawing €2bn ($2.2bn) a day. The bank lost half its stockmarket value in four days, as a self-imposed deadline to find a saviour loomed. On June 6th, it was declared by the Single Resolution Board (SRB), an independent agency set up by the European Commission in 2015 and charged with winding down banks, to be “failing or likely to fail”. The next morning, Santander, Spain’s biggest bank, announced its purchase for the symbolic sum of €1 ($1.10). It is to raise €7bn in capital to help absorb Popular’s property-related losses.

Spain’s government, the European Commission and Santander all cheered the outcome as a model European response to a bank crisis. Shareholders and junior bondholders in Popular have been wiped out. Spanish ministers pointed out that taxpayers would not have to pay for a rescue of the sort arranged for Bankia, a giant savings bank nearing collapse, when Spain needed a banking bail-out in 2012. Ana Botín, Santander’s boss, declared the deal good for Spain, for Europe, for Popular’s 4.4m customers and for her shareholders. Santander’s market leadership in Spain and Portugal will be strengthened.

The cheerleaders do have a point. Compared with previous banking disasters, this one has been handled, in Ms Botín’s words, with “agility and speed”. But Popular’s demise is also a reminder of Europe’s residual banking woes (see article).

In Spain these go back to uncontrolled lending that financed a construction bubble which burst in 2008. Popular, a bank whose executives historically had close ties to the Opus Dei movement in the Catholic church, tried to weather the crisis by turning to shareholders, not the government. In 2016 it completed its third capital increase since 2012. The strategy didn’t work. Popular’s 300,000 or so shareholders have now had the value of their investment reduced to zero. So have investors in some €2bn of bonds, including “contingent convertible” instruments, introduced after the crisis, that are turned into equity when things go wrong.

The terms of the Santander deal are likely to be challenged in court. Some shareholders called it an expropriation. Investors will also ask why supervisors with supposedly beefed-up powers failed to step in earlier. Popular underwent various European banking stress tests and its successive capital increases were deemed sufficient by regulators. As recently as April, Spain’s economy minister, Luis de Guindos, said it had “no problems of liquidity”.


did you know?

“Santander, Spain’s biggest bank, announced its purchase for the symbolic sum of €1 ($1.10). It is to raise €7bn in capital to help absorb Popular’s property-related losses.”

pennies on the dollar..

no defaults allowed..just bad banks and good banks..


~ by seeker401 on June 14, 2017.

9 Responses to “Banco Popular fails and is bought by Santander..blink and you missed it!”

  1. I closed my account 4 years ago, took me 4 months to get my money transfered, I was getting worried back then!

  2. And, one of the oldest Zionist banks; Babylon is falling; for the final time; one down; in peace

  3. Reblogged this on UZA – a people's courts court of conscience.

  4. Could have been a self fulfilling prophecy – they might have been profitable and liquid but some rumours carefully placed could have started a run
    for a cheap buy .

    Its a wonderful life bank run without a Jimmy Stuart

  5. Reblogged this on World4Justice : NOW! Lobby Forum..

  6. 2 days before the “fail”, at the Bilderberg meeting in the US there were present Ana Botin, the heiress & CEOof Santander, a steady Bilderberg member for years & years now and a World Bank representative,ex-government officer who passed the stress-tests for Spanish banks back in 2012

    “Spanish economy minister Luis de Guindos (left) and a man the World Bank claims is not its executive director Fernando Jiménez Latorre ”énez_Latorre, jesuit alumnus…died 11-S 2014, allegedly by a heart attack…only 3 days before the founder of El Corte Ingles, Isidoro Alvarez died..¿?…

    the local gossip says the grand-grandfather Botin (ópez/6000000006432063227) was a Rothschild’s agent…ópez/6000000006432063227


    …1857…Rothschild agent founding Santander Bank…

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