Bulletin: BBVA's Disposal Of Its U.S. Subsidiary Will Strengthen Capital Temporarily

MADRID (S&P Global Ratings) Nov. 16, 2020--S&P Global Ratings said today that Banco Bilbao Vizcaya Argentaria S.A.'s (BBVA; A-/Negative/A-2) announced sale of its U.S. subsidiary will lead to a capital boost in the short term, but downside risks to the bank's credit profile remain, as we expect it to deploy the proceeds. BBVA said today that it reached an agreement with PNC Financial Corp. to dispose of its U.S. subsidiary ($102 billion in assets) for a cash consideration of $11.6 billion, with the closing expected by mid-2021. We view this deal as an attractive opportunity for BBVA to divest business in a competitive market where it has struggled to reach an adequate scale and return on investment, as have many

...November 16, 2020 MADRID (S&P Global Ratings) Nov. 16, 2020--S&P Global Ratings said today that Banco Bilbao Vizcaya Argentaria S.A.'s (BBVA; A-/Negative/A-2) announced sale of its U.S. subsidiary will lead to a capital boost in the short term, but downside risks to the bank's credit profile remain, as we expect it to deploy the proceeds. BBVA said today that it reached an agreement with PNC Financial Corp. to dispose of its U.S. subsidiary ($102 billion in assets) for a cash consideration of $11.6 billion, with the closing expected by mid-2021. We view this deal as an attractive opportunity for BBVA to divest business in a competitive market where it has struggled to reach an adequate scale and return on investment, as have many other European banks. BBVA estimates that this transaction will improve its common equity Tier 1 ratio by about 294 basis points (bps), from 11.52% as of September 2020. This would position its capital well above its stated capital target (225 bps-275 bps above...

Bulletin