Bankinter has cleared the last major stumbling block to carry out the Línea Directa IPO and plans to make it effective at the end of April. This has been confirmed this Tuesday by the CEO of the entity, Maria Dolores Dancausa, after receiving the approval of the European Central Bank (BCE) to continue with the operation and has communicated it to the National Securities Market Commission (CNMV) this morning.
The ECB guarantee will allow Bankinter to distribute in kind among its shareholders the entire issue premium (amounting to 1,184 million euros) through the delivery of LÃnea Directa shares, as a previous step to the Insurer’s IPO .
This will mean the delivery to shareholders of 82.6% of the company’s share capital, while 17.4% will continue to be held with a financial stake of an estimated value of 249.7 million euros. In total, the enhancement of Línea Directa will generate 1 billion capital gains, which the bank will reserve to reinforce capital. The operation will raise the CET1 capital ratio by eight basis points and before separating the subsidiary, LÃnea Directa will distribute an extraordinary dividend of 120 million euros to Bankinter.
The group’s chief financial officer, Jacobo DÃaz, has indicated during the presentation of the operation that said participation of 17.4% will remain stable in the entity and will be classified as available for sale, so that movements in the price will not be represented in the income statement, but against equity. The fact that it is classified as available for sale responds to the fact that it is a stake that must be recognized at market value, but this does not mean that it is available to be sold, DÃaz explained. “The intention is to preserve this participation in the medium and long term, there is no sale interest, “he assured.
The insurer will go public with a reference price of 1,318 euros per share, thus being valued at 1,434 million euros.
The operation, approved at the last General Shareholders’ Meeting and initially scheduled for the second half of 2020, had to be postponed in line with the general prudence and capital conservation recommendations of the ECB given the change in the macroeconomic scenario caused by the pandemic of the coronavirus.
The European Central Bank continued to be reluctant to give its approval due to the fear that segregating Direct Line could reduce strength to Bankinter at a time when a rebound in non-performing loans is expected in the sector as a result of the coronavirus crisis. Even so, the body chaired by Christine Lagarde has agreed, clearing the way for its culmination and just a month before the Shareholders’ Meeting is held on April 21.
“We are proposing the operation now because we can do it. Our banking business has strengthened in recent years, we have diversified and Línea Directa has always been planned as a financial investment. It was always thought that it was going to go public,” he explained Dancausa at a press conference to report on the operation.
“It is important for Bankinter to focus on its banking business and Direct Line on its insurance business”, he added. And as far as the bank is concerned, it will continue to do so with no mergers in sight. “Our intention and determination is to continue as before. We are full of projects and we are confident that we will continue to grow without merging with anyone”, assured the board of directors. As the great merger between CaixaBank and Bankia ends, Dancausa has reiterated that, in its case, Bankinter” will continue to grow and we will do it alone. ”
To carry out the Direct Line operation, Bankinter will have to carry out a adjustment in your actions, a split, to adjust the securities of the insurer before and after the segregation. The shares will be distributed among its shareholders based on one share of the insurer for each Bankinter share, which will mean distributing a number of securities equivalent to the current number of shares of the bank: 898,866,154, corresponding to 82 , 6% of the capital. This means setting 100% of the insurer’s shares at 1,088,416,840. “Given that LÃnea Directa currently has 2.4 million shares, it will be necessary to carry out a split to adjust this figure with the new number of titles “, they point from the entity.
“With this operation, Bankinter aims to enhance the value of a company that has a 25-year track record, with more than 3 million clients, which is the leader in Spain in direct insurance, with a highly profitable business model and with growth that consistently exceeds that of the rest of the market “, justified Dancausa.