Ibercaja is about to act the button to start your listing on the stock exchanges Madrid, Barcelona, Bilbao and Valencia, which is expected to materialize in February, when a window of opportunity appears in the market. Moreover, this Thursday, the entity has officially confirmed its plans to the National Securities Market Commission (CNMV). The board of directors of the Aragonese bank met this Wednesday to specify the details and will do so again on imminent dates to deliberate and authorize the launch of the jump to the parquet, always before February 1, which is the deadline that has been set.
According to a statement released this Thursday early in the morning by the entity itself, the actions that will be put up for sale will belong to the Ibercaja Banking Foundation, the bank’s majority shareholder, which now controls 88% of the capital and which, after this operation, will try to stay below 50% to comply with the Banking Foundations Law, although always maintaining control of the bank.
With this operation, the entity also wants to favor the three transformations that it claims to have underway: commercial, operational and financial.
“We are facing a historic IPO operation for Ibercaja Banco, which strengthens the confidence that we all have in the future projection of the bank, thus giving continuity to the 145 years of exemplary trajectory that precedes us”, said its president, José Luis Aguirre.
The Bank was created in 2011 after the spin-off and transfer to Ibercaja Banco of the financial business of the former Caja de Ahorros y Monte de Piedad de Zaragoza, Aragón and Rioja, today transformed into the Ibercaja Foundation.
In 2013, it absorbed Banco Caja3, formed as a result of the spin-off and subsequent merger of the financial business of three old savings banks: Caja de Ahorros de la Inmaculada (now the Fundación Inmaculada de Aragón), Caja Badajoz (now Fundación Caja Badajoz) and Caja de Ahorros Círculo de Burgos (Círculo de Burgos Foundation). Those foundations are now minority shareholders.
As of September 30, 2021, Ibercaja Banco had 58.2 billion euros in total assets, making it the ninth largest Spanish bank in terms of total assets and a market share of 2.4% in loans to individuals and non-financial entities.
Steps to follow for the stock market jump
After the approval of the board and the official sending to the CNMV of the formal document with which it reveals its intention to list (‘intention to float’ or ITF) and the bank would begin to take the pulse of large investors to assess the interest that awakens the operation, something that has already been probing in recent weeks. A few days later, the project brochure would be published, in which the characteristics and prices of the shares are detailed, details that the bank will make known to analysts and potential investors in a ‘roadshow’ through the main financial markets in the world . From that moment and if nothing goes wrong along the way, there would be a period of between three and five weeks for the symbolic campaign touch to take place which marks the stock market debut.
Ibercaja has recently expressed its intention to go public in the first quarter of 2022 if market conditions were favorable, a decision that has already had to be postponed several times in recent years due to different circumstances. The entity has until the end of 2022 to materialize its jump to the parquet, as required by the law of the old savings banks so that the Banking Foundation reduces its participation in its capital below 50%, which is now 87.5%. The time limit initially expired at the end of 2020, but the Government of Spain granted it a two-year extension after the outbreak of the coronavirus pandemic, which made the execution of this operation unfeasible.
The Banking Foundation wants keep a stake of between 40% and 49%, depending on market conditions. In this way, it would remain the majority minority shareholder to ensure the bank’s strategy.
A favorable context
The expected window of opportunity could come in February for various reasons. On the one hand, external factors are blowing in favor of the financial sector due to the normalization of monetary policy. And on the other hand, the entity is internally at its best moment to face this historical process, with some economic results that have improved notably in the last year. In the first nine months of 2021, it obtained a net profit of 146 million euros, double that of the same period of the previous year.
The entity has also managed to substantially improve its profitability, efficiency and solvency ratios, indicators that it hopes to reinforce in the coming months when the application of the last employment regulation file (ere) agreed with the unions, which contemplates the departure of 750 workers and the closure of 199 bank branches (until last December a third of these had already been closed).
For all these reasons, Ibercaja’s business prospects have improved, which is why it modified upwards theThe return on equity (ROTE) targets of up to 9% by 2023, compared to the 7% initially estimated, thus the control of delinquency, as reported in December to the CNMV. In this way, it would be able to cover the cost of capital, as the ECB demands from the sector.
As published by ‘Expansión’, the bank closed preliminary contacts with investors this week, a step prior to the board of directors being able to decide on the launch of the move to the parquet. This economic newspaper ensures that your plan is to start trading with a Rating between 1,650 and 2,100 million euros. The objective of Ibercaja’s management would be to have the support of large investors, such as investment funds of recognized prestige in the market.
Rothschild acts as an independent advisor to Ibercaja, which also has Morgan Stanley and JPMorgan as global coordinators for the IPO and UBS and Bank of America as placement entities.