Abanca
ABANCA Corporación Bancaria is a Spanish bank based in Galicia that provides banking services across Spain.
It was created in September in 2011 following the "bankisation" of Novacaixagalicia savings bank as NCG Banco. It operates in the autonomous communities of Galicia, Asturias and the province of León, in other parts of Spain and in Portugal, as well as offices in the United Kingdom, Germany, France, Switzerland, Brazil, Venezuela, Panama, Mexico and the United States.
Abanca has been designated as a significant institution since the entry into force of European Banking Supervision in late 2014, and as a consequence is directly supervised by the European Central Bank.
History
Formation of NCG Banco
The bank was founded as NCG Banco, S.A. in September 2011 following the bankisation process of Novacaixagalicia. The company would operate as Novagalicia Banco in Galicia, Asturias and León and as EVO Banco in the rest of Spain.Abanca originated from the savings bank NovaCaixaGalicia, established on December 1, 2010, following the merger of Caixa Galicia and Caixanova. This formation was a response to the stipulations of Royal Decree Law 2/2011, which necessitated the creation of a banking entity to manage the operations previously handled by NovaCaixaGalicia. At its inception, this subsidiary was wholly owned by the savings bank.
On September 14, 2011, NCG Banco, S.A. was established, with José María Castellano appointed as the executive chairman and César González-Bueno Mayer as the CEO. Notably, NCG Banco was the first bank to incorporate the Galician language in its founding deed.
On September 30, 2011, the European Commission in Brussels authorized the nationalization of NCG Banco, along with Catalunya Banc and Unnim Banc. As Novagalicia Banco's predecessor, the savings bank Novacaixagalicia, was subsequently bailed out by the Government of Spain the majority of the shares in the company were held by the bailout program Fund for Orderly Bank Restructuring. As part of this process, NCG Banco received €2,465 million in capital from the Fund for Orderly Bank Restructuring. Consequently, the FROB acquired a 93.16% stake in NCG Banco. The Novacaixagalicia Foundation holds 6.84% with the remaining 2.59% being held by private investors.
Consequently, without its banking business, NovaCaixaGalicia's role was reduced to financially supporting its social work through the revenues derived from its ownership stake in NCG Banco.
On October 19, 2011, the commercial brand Novagalicia Banco was launched. Subsequently, on November 14, it was announced that the bank would operate under two distinct brands and business models: Novagalicia Banco serving Galicia, Asturias, Castilla y León, and international markets, and NGB covering the rest of Spain. This strategic adjustment also led to the formation of two new business units: one dedicated to wholesale banking and the other, known as the Singular Asset Management Unit, focusing on non-strategic assets.
On January 12, 2012, 17 Galician businessmen entered the bank's capital through the purchase of 2.59% of the capital from the Fund for Orderly Bank Restructuring. This was divided between 90.57% of the FROB, 2.59% of the private investors and 6.84% of NovaCaixaGalicia.
Formation and Sale of Evo Bank and Restructuring of NCG Bank
On 12 March 2012 NCG Banco, S.A. began operating its assets outside of Galicia under the brand name EVO Banco and launched its main financial product the Cuenta Inteligente. In its first four weeks EVO Banco had attracted 8,290 clients and 70 million euros worth of investment.On March 22, NCG Banco, S.A. and its union representatives came to an agreement to avoid forced layoff.
On July 12, 2012, the bank launched a media campaign featuring personal apologies from its Executive Chairman and CEO to its customers. This campaign addressed the previous investments in real estate made by the two savings banks that merged to form the bank during Spain's real estate bubble. Additionally, it acknowledged the sale of preferred shares to customers who were unaware of the associated risks. This initiative marked the first instance of a Spanish bank undertaking such a public apology campaign.
On December 27, 2012, FROB injected €5,425 million of aid from the European Stability Mechanism into the bank, assuming full control of the entity. As a result, NovaCaixaGalicia transitioned into a special character foundation due to the loss of its capital in NCG Banco. Concurrently, the FROB converted €1,162 million worth of preferred shares, initially subscribed in December 2010 by NovaCaixaGalicia, into ordinary shares.
As part of NCG Banco's restructuring plan, it was determined that by 2017 the bank should concentrate its business model on retail lending and lending to small and medium-sized enterprises within its primary historical regions. The plan also included discontinuing credit lines associated with real estate developments and reducing its activities in the wholesale market.
On July 19, 2013, the Deposit Guarantee Fund acquired a 25.57% stake in NCG Banco following a disbursement of €801.7 million, aimed at providing liquidity to the bank's preference shareholders and subordinated debt holders. After this transaction, the remaining ownership was distributed as follows: the FROB held 63%; hybrid instrument holders owned 9% ; and the bank itself retained 2% as treasury stock.
On 9 September 2013 Novagalicia Banco announced that it would sell the EVO Banco division to the American private equity firm Apollo Global Management for 60 million euros.
On October 18, 2013, EVO Banco was registered in the Special Registry of Banks and Bankers of the Bank of Spain.
On November 19, 2013, FROB initiated the binding bidding process for the sale of NCG Banco. Potential bidders included notable banking institutions such as Banco Santander, BBVA, CaixaBank, and the Venezuelan bank Banesco, alongside investment funds like Guggenheim, WL Ross, J.C. Flowers, and Anchorage. The deadline for submitting binding bids was set for December 16. Following the review of these bids, provided no single offer was overwhelmingly more favorable, a second phase would commence. This phase would involve selecting the three entities with the best proposals, who would then be invited to submit their final offers.
On December 9, 2013, NCG Banco finalized the transfer of assets, liabilities, customers, employees, and services to EVO Banco. This completion occurred three months after the signing of the pre-sale agreement with Apollo European Principal Finance Fund II, a fund managed by entities affiliated with Apollo Global Management.
On December 18, 2013, Banco Etcheverría, a subsidiary of Banesco, emerged as the winner in the first phase of the auction for NCG Banco with a bid of €1,003 million. This bid did not include public aid but incorporated additional guarantees of €275 million. As a result, Banco Etcheverría acquired an 88.33% stake in NCG Banco, which was primarily held by the FROB and the Deposit Guarantee Fund. The FROB received €712 million for its shares, culminating in a total loss to taxpayers of €8,269 million. Meanwhile, the FGD obtained €291 million from the sale, leaving a deficit of €511 million in the financial system.
On February 28, 2014, NCG Banco completed the transfer of all shares of EVO Banco to the Apollo fund, finalizing the acquisition of EVO Banco. Following the conclusion of this sale, NCG Banco expanded its presence by opening branches in other Spanish cities under the Novagalicia Banco brand.
Sale of NCG Banco and Formation of Abanca
Subsequently, Novagalicia Banco began opening branches in other cities in Spain under its own brand.On 11 November 2013, the Spanish government bailout program Fund for Orderly Bank Restructuring began the privatization process of Novagalicia Banco. After analyzing six bids presented by various Spanish banks, investments funds and international banks on December 18 the FROB opted to sell its shareholding to Banco Etcheverría, S.A, a Venezuelan-owned Spanish bank, for €1.03 billion
In April 2014, Banesco announced that the Novagalicia Banco brand would be discontinued following the completion of its acquisition of NCG Banco. A new brand was set to replace it.
On June 20, 2014, the European Commission approved the sale of NCG Banco along with the proposed amendments to its restructuring plan.
The sale was finalised on 25 June 2014 when Banesco, Banco Etcheverría's parent company, made an initial payment of €403 million. Banesco would pay a further €200 million on 30 June 2017 and the final payment of €300 million a year later. The board of directors was constituted, which approved the appointment of Banco Etcheverría's chairman, Javier Etcheverría, as chairman of NCG Banco.
The acquisition was conducted through Banesco Holding Financiero 2, S.L.U., which held the majority of the capital of Banco Etcheverría. Following the acquisition, Banesco Holding Financiero changed its corporate name to Abanca Holding Financiero, S.L.U.
On June 27, 2014, the bank commenced operations under the Abanca brand name, replacing the previously used Novagalicia Banco brand.
Rebranding
The following day, at an event held in the Galician capital, Santiago de Compostela, Novagalicia Banco revealed the new brand name for their bank: ABANCA, a change which went into effect the very same day in all branches throughout the region.Takeover of Banco Etcheverría
On October 6, 2014, the General Shareholders' Meetings of NCG Banco and Banco Etcheverría approved the merger by absorption of Banco Etcheverría by NCG Banco. The merger was finalized on November 14, 2014, with the resulting entity establishing its headquarters in Betanzos.In December 2014 the company announced the merger of NCG Banco, S.A. with parent company Banco Echeverria, S.A. The company changed its legal name to ABANCA Corporación Bancaria, S.A. and its headquarters would be in the town of Betanzos, in the former headquarters of Banco Echeverria.