back Back

PNC to take over BBVA U.S. subsidiary for $11.6 billion

By Pavithra R

November 17, 2020

  • Pnc
  • USA
Share

BBVA has announced entering into an agreement to sell its subsidiary in the U.S. to PNC for $11.6 bn (€9.7 billion) in cash, an amount that represents 19.7 times the unit’s 2019 earnings, and that is almost 50% of BBVA’s current market capitalization, creating significant value for shareholders.  The transaction is expected to close in mid-2021 once the required regulatory approvals have been obtained.

In the U.S., BBVA is a Sunbelt-based bank with $100 bn in assets and 637 branches, with market shares in Texas, Alabama and Arizona. On closing of the transaction, PNC, based in Pittsburgh, Pennsylvania, will become the country’s fifth-largest bank by assets.

“This is a very positive transaction for all sides. PNC has recognized the great value of our unique client franchise and of our great team in the US, who will be part of a leading financial services group in the country. The deal enhances our already strong financial position. We will have ample flexibility to profitably deploy capital in our markets strengthening our long-term growth profile and supporting economies in the recovery phase, and to increase distributions to shareholders,” said BBVA Group executive chairman Carlos Torres Vila.

The transaction excludes the broker-dealer (BBVA Securities) and the branch in New York, through which BBVA will continue to provide corporate & investment banking services to its large corporate and institutional clients. It also excludes the representative office in San Francisco and the FinTech investment fund Propel Venture Partners. The deal is to have a positive impact on BBVA’s fully loaded CET1 ratio of c.300 basis points, or €8.5 billion of CET1 generation. The sale will generate a capital gain net of taxes of approximately €580 million and BBVA Group’s tangible book value will increase by €1.4 billion.

“Our acquisition will accelerate our growth trajectory and drive long-term shareholder value. This transaction is an opportunity to navigate our future from a position of strength, accelerating PNC’s expansion while drawing on our experience as a disciplined acquirer. We are excited to bring our industry-leading technology and innovative products and services to new markets and clients, leveraging our mutual commitment to building diverse and high performing teams and supporting the communities we serve,” said William S. Demchak, PNC’s chairman, president and chief executive officer.

Founded in 1857, BBVA is a customer-centric global financial services group. The Group has a strong leadership position in the Spanish market, is the largest financial institution in Mexico, it has leading franchises in South America and the Sunbelt Region of the United States.

Previous Article

November 17, 2020

Tencent Cloud deploys Tencent Distributed Database in Indonesia

Read More
Next Article

November 17, 2020

ANZ makes strategic investment in Aider, enhancing digital SME offering

Read More










IBSi Daily News Analysis

FinTech, future, trends

December 08, 2022

Pnc

Here’s how the FinTech landscape looks like for 2023

Read More

IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related News

Today

Swiss Digital Bank Alpian goes live on Temenos Banking Cloud

Read More

Today

bondIT raises $14m in new investment round led by BNY Mellon

Read More

Today

Arab National Bank leverages Confluent to advance collaboration with FinTechs in Saudi Arabia

Read More

Related Reports

Sales League Table Report 2022

£1,500.00 / year

Know More
Global Digital Banking Vendor & Landscape Report Q3 2022

£1,500.00 / year

Know More
Wealth Management & Private Banking Systems Report Q3 2022

£1,500.00 / year

Know More
Global Transaction Banking Vendors and Landscape Report Q3 2022

£1,500.00 / year

Know More
Treasury & Capital Markets Systems Report Q3 2022

£1,500.00 / year

Know More

IBSi Sales League Table

The industry acknowledged barometer of global banking technology vendor performance!
Get your copy now!
close-link
Get your copy now! IBSi Sales League Table 2022