Bulletin: Banco de Sabadell's Sale Of Its Asset Management Business Slightly Enhances Its Capital

MADRID (S&P Global Ratings) Jan. 22, 2020--S&P Global Ratings said today that Banco de Sabadell S.A.'s sale of 100% of its asset management business to Amundi Asset Management S.A. will benefit our risk-adjusted capital (RAC) ratio by about 20 basis points. We now estimate that Sabadell's RAC ratio will stand at 7.6%-8.1% by end-2020, which is commensurate with our current ratings on the bank (BBB/Stable/A-2). The transaction, which is due to close in the third quarter of 2020 and includes a strategic partnership with Amundi, will generate €351 million in capital gains for Sabadell, of which €58 million will accrue proportionally over the next 10 years. The deal also includes a €30 million earn-out in 2024, subject to increasing volumes

...January 22, 2020 MADRID (S&P Global Ratings) Jan. 22, 2020--S&P Global Ratings said today that Banco de Sabadell S.A.'s sale of 100% of its asset management business to Amundi Asset Management S.A. will benefit our risk-adjusted capital (RAC) ratio by about 20 basis points. We now estimate that Sabadell's RAC ratio will stand at 7.6%-8.1% by end-2020, which is commensurate with our current ratings on the bank (###/Stable/A-2). The transaction, which is due to close in the third quarter of 2020 and includes a strategic partnership with Amundi, will generate 351 million in capital gains for Sabadell, of which 58 million will accrue proportionally over the next 10 years. The deal also includes a 30 million earn-out in 2024, subject to increasing volumes under management. Strategically, the decision to sell the asset management business may look bizarre in the context of prevailing ultra-low interest rates, in which para-banking businesses (insurance, pensions, and funds) offer banks an important...

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