Investor Alert

June 14, 2011, 1:50 p.m. EDT

Caixa says not favorable time for Spanish IPOs

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By Christopher Bjork

(Adds detail on bad loans in paragraph 4)

SANTANDER, Spain -(MarketWatch)- The chairman of La Caixa Isidro Faine said Tuesday that tough market conditions are making it difficult for the country's savings banks to list on the stock exchange.

Even so, he said, some savings bank groups are likely to succeed. Faine is also the head of Spain's savings bank association, CECA.

At a conference, Faine said lenders face both a tough outlook, with low interest rates, high unemployment and slow economic growth. Also, working against banks is the heightened country risk, significant debt maturities, and a lack of confidence in Spain's financial system, he said.

As a result of the sluggish environment, Faine said he expects the pool of bad loans held by Spanish banks to grow further in coming months, reaching roughly 7% of the total loans by the end of the year. Nonperforming loans stood at 6.1% at the end of March, according to the latest available data from the Bank of Spain.

"It's not a favorable time to list," Faine said. La Caixa, Spain's fourth-biggest lender by assets, listed its industrial holding company Criteria CaixaCorp SA (CRI.MC) in 2007, and earlier this year announced plans to move its banking assets into this listed vehicle, effectively becoming a listed bank.

Two other groups of savings banks, Bankia and Banca Civica, are planning to sell shares in the coming weeks, against a backdrop of rising tensions in financial markets.

Speculation that these listings could be delayed was heightened last week when telecommunications giant Telefonica SA /zigman2/quotes/200416613/delayed ES:TEF -1.16% at the last minute cancelled the planned IPO of its call-center unit Atento Inversiones y Teleservicio, citing the "unfavorable state of markets."

However, both lenders said Tuesday that they are sticking to their plan to list by mid-July.

ES : Spain: Madrid
-0.05 -1.16%
Volume: 12.24M
Oct. 2, 2023 5:38p
P/E Ratio
Dividend Yield
Market Cap
€22.24 billion
Rev. per Employee

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