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25 June 2013

City AM: Spain holds out for a better price from sales of nationalised banks

Spain will not make a quick sale of its nationalised banks, the country's economy minister insisted, and will instead look to get a good price for the bailed-out institutions.

A report from Nomura and McKinsey had recommended selling Catalunya Bank and NCG Banco before their assets deteriorate further, requiring more financial support from the state. But minister Luis de Guindos rejected the idea. “The buyers always try to give the impression that things are worth less than what they are. We are convinced that these entities have value”, he said. “We have to do it at the right moment and the process must be competitive. We have five years to do it, there is no need to rush. I know there are some that want it to go quickly.”

The government had been in talks to sell Catalunya Bank, but potential buyers wanted government guarantees to protect them against future losses at the lender. The bank lost €18.5 million in the first quarter of 2013 and analysts fear it could face further losses of up to €4 billion as the country’s recession continues, hitting house prices and increasing bad loan levels.

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© City A.M.

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