These actions will be complemented by the corresponding burden-sharing exercises – preference shares and subordinated debt – which will be undertaken in the first quarter of 2013.
The Governing Committee of the Fund for the Orderly Restructuring of the Banking Sector (FROB), at its meeting today, has adopted the necessary agreements, subject to the non-opposition of the Ministry of Financial Affairs and Public Administration, to conclude the recapitalisation of the fourbanks in which the FROB has a majority holding – BFA-Bankia, NCG Banco, Catalunya Banc and Banco de Valencia – through the related decisions for the injection of funds, according to the provisions of the restructuring/resolution plans approved on 27 November by the Spanish authorities and on 28 November by the European Commission. The four banks included in Group 1, according to the terminology of the Memorandum of Understanding (MoU), will thus be recapitalised at the end of 2012 and together with the burden-sharing exercises, will meet the high-quality capital requirements of 9 per cent and the capital requirements identified in the stress test published on 28 September. The banks will receive in the coming days a total of €36.97 billion, after deducting the capital needs identified in the stress tests through the burden-sharing exercises and the transfer of problem assets to Sareb.
The capital injections will be implemented through the related operations of capital reduction and increase at NCG Banco, Catalunya Banc, Banco de Valencia and BFA. In the case of Bankia, the recapitalisation will be undertaken through the issuance of contingent convertible bonds subscribed by BFA which will be transformed into capital after the capital reduction operation that will take place at the beginning of 2013.
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© FROB - Fund for the Orderly Restructuring of the Banking Sector
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