Santander Rescues Popular as Spain Real Estate Loans Sink Lender
In what may prove one of the final acts in Spain's banking crisis, Banco Santander SA stepped in to take over Banco Popular Espanol SA before the bank collapsed under a mountain of bad property loans.
June 07, 2017 at 11:00 PM
9 minute read
In what may prove one of the final acts in Spain's banking crisis, Banco Santander SA stepped in to take over Banco Popular Espanol SA before the bank collapsed under a mountain of bad property loans.
Santander will tap shareholders for about $7.9 billion to shore up Popular's balance sheet after acquiring the bank for $1.13 in a deal brokered by European regulators, according to a filing on Wednesday. The deal imposes losses of about $3.7 billion on Popular stock and bondholders and serves as the first real test of European rules to deal with failing banks.
The forced sale is the first major action by the Brussels-based Single Resolution Board, set up in January 2015 to deal with euro-area bank failures and wind them down with minimal impact on taxpayers and financial stability. Popular's situation had become more urgent in recent weeks. Chairman Emilio Saracho struggled to find a buyer, plans for a possible share sale were complicated by a stock slump and the bank's liquidity situation worsened.
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