Unicaja and Liberbank study the future of their 20% stake in Caser without the obligation to make a forced sale

Both have the insurer as a partner in bancassurance, so they will not have to break any agreements after the merger.

Caser headquarters in Madrid.

Unicaja and Liberbank are getting closer to becoming a single entity and, on this path, they are studying the future of the joint position that they will hold in caser, close to 20%, but without having the obligation to carry out a forced sale. Both banks market their insurance separately and, therefore, would not incur no incompatibility with regard to bancassurance agreements once the Asturian bank is integrated into the Malaga bank.

The CEO of Liberbank and future of Unicaja Banco, Manuel Menendez, stated on December 20 in a presentation to analysts that “since Caser is the partner of both entities in general insurance, there is no type of incompatibility”.

A situation, therefore, very different from what other entities are finding, such as CaixaBank and Bankia, which, by having bancassurance agreements with different companies, with the merger are forced to break one of the two.

This situation, in fact, forces CaixaBank and Mapfre, a former partner of Bankia, to reach an agreement on its breakup, for which the new entity has already agreed to assume a 20% penalty. Both companies work with an outside consultant to obtain a valuation of the business and set a price that satisfies both.

The position close to 20% that the new Unicaja will have in Caser stems from the restructuring of the insurer’s capital that took place last year, when the Swiss group Helvetia closed the acquisition of a majority stake close to 70% of Caser. The banks Ibercaja, Unicaja and Liberbank, with which Caser has distribution agreements, decided to remain in their capital, while Bankia, CaixaBank, Abanca and other entities left it.

Additional capital required

In the particular case of Liberbank, it sold 2.23% of Caser to the Swiss insurer to reduce its stake to 9.9% and thus limit the capital requirement that entities that maintain significant investments (above 10%) in non-financial companies have, as imposed by Basel III.

For its part, Unicaja already had 9.9% of Caser at that time. Now, with its own merger project, the new Unicaja would reach 19.8% of the capital of the insurance company.

Manuel Azuaga, president of Unicaja, and Manuel Menéndez, CEO of Liberbank.

Manuel Azuaga, president of Unicaja, and Manuel Menéndez, CEO of Liberbank.

Internal sources of these entities reiterate that the resulting bank is not required to reduce or maintain its participation in the Spanish insurer and that the most appropriate strategy for the consolidated group will be established in due course.

“Regarding the 20% joint participation, we do not expect a special impact on regulatory capital, since we have the option to reduce it in the same terms in which Helvetia acquired control of the company last year”, added Menéndez in the aforementioned presentation before the analysts in reference to Caser.

Two months to merge

Meanwhile, the merger of Unicaja and Liberbank has a few weeks left to become a reality. Both banks are currently in the phase of receipt of authorizations by supervisors banks, the National Securities Market Commission, the National Markets and Competition Commission, the General Directorate of Insurance and Pension Funds and, ultimately, the Ministry of Economic Affairs, which will be, foreseeably, the last to arrive

The calendar with which both entities work is the same that they set after reaching an agreement on their merger last Christmas. According to it, the legal integration will take place at the end of the second trimester or, at the latest, at the beginning of the third.

It will not be until then when the new bank faces the collateral effects of the merger, such as the adjustment of the workforce and the commercial network or the agreements that each entity has for the management of its businesses. Bancassurance will not be, in principle, a problem, as it has been in other mergers, given that both share a provider.