Bulletin: Abanca Can Accommodate The Planned Acquisition Of Targobank

MADRID (S&P Global Ratings) Dec. 22, 2022--S&P Global Ratings today said that Spain-based Abanca Corporación Bancaria S.A. should be able to comfortably accommodate the potential acquisition of Targobank (total assets €4 billion, representing 5% of Abanca's consolidated total assets) with minimal impact on its adequate capitalization. We see the transaction as non-transformational for Abanca's business and expect that it would only slightly erode Abanca's risk-adjusted capital (RAC) ratio by 12-17 basis points (bps). We therefore forecast that Abanca's RAC ratio would remain around 9.5%-9.6% by end-2024, which provides enough buffer for the bank to withstand a potentially harsher economic environment. The acquisition resembles previous deals made by Abanca and in our view, fits well with its strategic focus to gain

...MADRID (S&P Global Ratings) Dec. 22, 2022--S&P Global Ratings today said that Spain-based Abanca Corporaci=n Bancaria S.A. should be able to comfortably accommodate the potential acquisition of Targobank (total assets 4 billion, representing 5% of Abanca's consolidated total assets) with minimal impact on its adequate capitalization. We see the transaction as non-transformational for Abanca's business and expect that it would only slightly erode Abanca's risk-adjusted capital (RAC) ratio by 12-17 basis points (bps). We therefore forecast that Abanca's RAC ratio would remain around 9.5%-9.6% by end-2024, which provides enough buffer for the bank to withstand a potentially harsher economic environment. The acquisition resembles previous deals made by Abanca and in our view, fits well with its strategic focus to gain presence in the Mediterranean area, where Abanca's footprint is more limited. The acquisition should expand Abanca's loan book by about 6.9% and its customer deposits by 4.4%....

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