Banco Popular Acquires Citi Bank in Spain
Spain’s Banco Popular will purchase Citi Bank’s retail banking and credit card business in Spain. Popular is Spain’s fifth biggest bank when ranked by market value.
Popular will be taking on about 950 employees and 45 branches from Citi in this deal, along with 2 billion Euros ($2.7 billion) in deposits and 1.1 million credit card accounts. Spain has been in a long term economic slump, making it difficult for foreign banks to keep their heads above water in the country. This acquisition is a testament to that.
Even though the Spanish economy is recovering from the recession, domestic and foreign banks alike are struggling to regenerate profits. Loan defaults are still near an all time high for the country. Banks like Popular are capitalizing on the wave of foreign banks pulling out of the country and using this as a way to expand their business.
Britain’s Barclays Bank is also looking for a Spanish buyer to take over their accounts in the country. They are looking to maintain an investment team in Spain but would like to find a buyer for their retail banking sector. So far, Caixabank appears to be the most interested party.
Citi said it will still remain in Spain but will focus on expanding its private bank and advising sector there. Popular did not provide information about how much it paid for the Citi acquisition, but said the purchase would likely come to a close during the third quarter of this year.