BBVA’s hostile bid for Sabadell increases execution risks and represents a “distraction,” according to Fitch

BBVA’s hostile bid for Sabadell increases execution risks and represents a “distraction,” according to Fitch

Madrid, May 10 (European Press) –

BBVA’s decision to make a hostile bid for Banco Sabadell represents an increase in risks in executing the deal, as well as being a “distraction” for the two banks, notes the credit rating agency Fitch in a report published on Friday. .

“The relatively long period until the potential approval date (six to eight months) adds uncertainty and may constitute a source of distraction for both banks,” the agency said.

Fitch explains that if shareholders accept the OPA, the potential implications for banks’ ratings will be assessed.

In principle, the agency believes that BBVA will benefit from broader scale and local excellence, especially in the SME sector, from €850 million of cost synergies and greater geographical exposure to developed countries.

Fitch will also take integration-related risks into account when rating, although it stresses that BBVA has a strong track record when it comes to merging banks. “But this acquisition entails greater challenges due to its unfriendly nature and its potential impact on more overlapping areas,” Fitch said.

If the OPA fails, the risk rating does not anticipate negative impacts on the credit profile of the two entities, which will continue to benefit from the positive environment due to the interest rate cycle. In the case of BBVA, it will be strengthened by its Mexico subsidiary, while Sabadell will benefit from TSB’s improved performance.

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