CaixaBank - EGM 02 December 2020
In item 2, shareholders are called to approve the merger by absorption of Bankia by CaixaBank. After the merger, Bankia will be dissolved and all of its assets and liabilities will be transferred en bloc to CaixaBank.
One Bankia share will be exchanged for 0.6845 CaixaBank shares. Bankia shareholders will receive a premium of 20.5%, in line with the average premium of 21% observed in similar transactions in Spain in the last 7 years.
The merger is expected to:
- generate revenue synergies (€290 million annually)
- save costs (€770 million annually by 2023)
- lower their non-performing loan ratio to 4.1%
- achieve a CET1 ratio of 11.6% (by Q1 of 2021) and
- improve ROTE, by 8%, in 2022.
The conditions of the exchange are fair and the projections of the resulting entity are beneficial for CaixaBank shareholders, creating a stronger, leading bank with over 20 million clients. Hence, we recommend support.
In item 3.1, shareholders are asked to approve the election of Mr. Goirigolzarri as executive Director for a period of 4 years. He will be elected executive Chairman after the EGM. We believe in the separation of powers, and we consider that a former executive should not be appointed as Chairman; however, we understand that his appointment will bring continuity and, therefore, we recommend support.
The rest of the proposed appointments (items 3.2 to 3.6) are in line with our guidelines. We commend the Company for having an adequate level of independence (60%), a fair representation of strategic shareholders as well as sufficient new Directors appointed by Bankia. Therefore, we recommend support.
Caixabank is an investment company based in Spain. Co. is involved in investment portfolio management activities across two areas: Services and Financial Business and Insurance. In the services area, Co. provides investment solutions for companies involved in the infrastructure, energy, services and entertainment sectors. In the financial business and insurance area, Co. is engaged in the investments for international banks, insurance and specialist financial services. Co. focuses most of its banking investments in India, China, the U.S., and Central and Eastern Europe with a particular interest in retail banking. Co. is also involved in the disinvestments activities.
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