Banking M&A Digest #50 (14.11.2019)

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Corporate Financier’s Notes  

by Aivars Jurcans

Done! And Done

Allianz, a German insurer, has agreed to acquire a 4% stake in Taikang Life Insurance, a Chinese insurer, from Goldman Sachs for EUR 800 million. Established in 1996, Taikang has 4,000 branches across the country.

Source: FT

UniCredit has sold its 8% stake in Mediobanca, an Italian investment bank, through an accelerated book build.

Source: FT 

SBI Holdings, a Japanese internet company, has agreed to form a capital and strategic tie-up with Fukushima Bank, a regional lender, and to acquire a 17.91% stake becoming its biggest shareholder. 

Source: Reuters

EMP Payments, an Australian payment solutions provider, has agreed to acquire Prepaid Financial Services, a London-based provider of e-wallets and digital banking software with operations in 24 countries, valued at about USD 290.1 million.

Source: Reuters

Canadian Imperial Bank of Commerce has agreed to sell “a significant portion of its majority stake” in CIBC FirstCaribbean to GNB Financial Group (owned by Starmites, a financial holding company of Gilinski Group) for USD 797 million. CIBC will retain a 24.9% stake in the unit after the deal closes. The sale values FirstCaribbean at about USD 1.2 billion, compared with USD 2.8 billion when CIBC took over most of the business.

Source: Reuters, Bloomberg

Deals On The Table

Purpose Investments, a Toronto-based Canadian ETF provider with more than USD 5.7 billion in assets under management, is said to be looking to sell a 25% stake or less “to a global player” to help to expand into other markets.

Source: Bloomberg

Eurobank, Greece’s 3rd largest lender, has concluded that competing offers from PIMCO, a US funds group, and doValue, an Italian bad loan specialist, for FPS, its loan-recovery unit, are “both satisfactory”. Eurobank is said to value FPS at about EUR 300 million.

Source: Reuters

Sumitomo Mitsui Financial Group and OCBC Group, a Singapore lender, are said to be vying to buy PT Bank Permata, an Indonesian mid-sized lender, owned by Standard Chartered (45%) and PT Astra International (45%).

Source: Reuters

Military Commercial Joint Stock Bank, a Vietnamese lender, is said to be planning to raise about USD 240 million from the sale of a 7.5% stake to foreign investors via a private placement expected to be completed by the end of November.

Source: Bloomberg

Metrics To Watch

Allianz, a German insurer, reported a Solvency II capital ratio – a key indicator of balance sheet strength – of 202%, a 27% decrease compared to the end of 2018, but well above the minimum target of 180%.

Source: FT

Natixis, a French investment bank, net interest income represented only 8% of revenues after Q3 2019 as a result of asset-light strategy. Its core tier one capital ratio remained flat at 11.5%. 

Source: FT

UniCredit increased its common equity tier one ratio to 12.6% in Q3. The sale of EUR 5 billion of bad loans has pushed its NPL exposure down to 5.7% from 7% after Q2. Its return on tangible equity in Q3 was 8.7% while its core equity tier one ratio stood at 12.6%.

Source: FT

The Co-Operative Bank, a UK bank, reported a reduction in its so-called individual capital requirement – a bank-specific measure determined by the Bank of England’s Prudential Regulation Authority – from 8.69% of risk-weighted assets to 6.54%. The bank expects its underlying cost-to-income ratio for the full year to be less than 105%.

Source: FT

Commerzbank’s, a German lender, return on tangible equity in Q3 was 4.4%, compared with 3.5% a year earlier (the target level of about 4% is below its estimated cost of capital of around 10%). At 12.8% of risk-weighted assets, its common equity tier one ratio was 0.4 percentage points lower than a year ago.

Source: FT

Follow The Money

MIR Capital, a PE fund established by Intesa Sanpaolo, Italy’s retail bank, and Gazprombank, a Russian lender, is said to buy a minority stake in a holding company and to inject EUR 12 million to support the expansion of Cioccolatitaliani, a confectioner.

Source: Reuters

VTB Capital, the investment arm of Russia’s VTB, has sold its entire stake in Vivacom, a Bulgarian telecoms operator, to United Group, a telecoms and media company. The transaction details were not disclosed but the deal value is estimated at EUR 1.2 billion.

Source: Reuters

Moelis Australia, an investment bank, has agreed to buy 50% of Westfield Marion Shopping Centre for USD 462.23 million.

Source: Reuters

Banco Santander, a Spanish lender, and Telecom Italia have agreed to set up a JV to provide consumer credit services in Italy. Santander will control 51% in the JV scheduled to begin operations in 2020.

Source: Reuters

Up-and-Comers

TransferWise, a European financial technology startup, is about to launch an international payments service in Malaysia as part of an ongoing Asian expansion. Established in 2011, the company recently raised funds at a USD 3.5 billion valuation.

Source: Bloomberg

On The Baltic Shores

Coop Pank, an Estonian lender with 2% market share, is said to be preparing to raise EUR 37 million in an initial public offering. Over the last 3 years the bank is said to have tripled its loan book to EUR 420 million and doubled its client volume to about 60,000.

Source: Bloomberg

Exciting Numbers

According to a survey by UBS, the rich individuals polled around the world are holding 27% of their investable assets in cash, up from 26% three months ago.

Source: FT

The 4 big Australian banks hold USD 960 billion in assets, equivalent to 140% of Australia’s gross domestic product.

Source: FT

NPLs across the EU stand at EUR 636 billion, or 3.1% of all loans, according to data from the European Banking Authority, compared with EUR 1.15 trillion, or 6%, in June 2015.

Source: FT

A Thought Worth Noting

“Weak economic growth and low bond yields will persist possibly for a decade or more. This is a new era for the world. Negative interest rates will lead to behavioural changes across the private sector.”

Asoka Wohrmann,  CEO, DWS

 

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Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.

Photo by Joe Taylor on Unsplash

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