Background

  • Founded in 1926, Banco Popular is one of the leading Spanish banks, with around €160bn of total assets and a customer base of more than 7 million clients
  • Banco Popular operates in the following business lines: retail & commercial banking, asset management, insurance and institutional & markets. Its business is centered mainly on retail and commercial banking services for SMEs and individuals

Transaction Overview

  • DC Advisory advised on the sale of Banco Popular's depositary banking business in Spain
  • Banco Popular had its own internal business unit to cater for depositary activity for Mutual funds, SICAVs, Pension Funds, EPSVs through its own business unit
  • The new regulations (AIFMD, UCITS V, MiFD II, etc.) and the growing complexity of the financial instruments of the capital markets, result in a higher operational and reputational risk for the depositary entities and in relevant capital expenditures to be incurred in order to adapt to the new demands
  • Following a strategic analysis, Banco Popular decided that the depositary unit was not core for the bank and decided to sell it to a specialized player who could become a reliable long-term partner
  • Following a competitive process, BNP Paribas Securities Services, one of the world leading players in the depositary industry and a relevant player in Spain, acquired the depositary unit of Banco Popular

Outcome

  • Ensures the best quality of the depositary services to its clients, through an alliance with one of the leading players in the depositary industry
  • Eliminates/minimizes operational, economic and reputational risks derived from a non-core and highly-regulated activity
  • Removes potential contingencies and additional expenses resulting from the new regulation for depositary entities, thus allowing the bank to focus on its traditional banking business
  • Strengthens the balance sheet of the bank with a relevant capital gain

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