BBVA USA Bancshares

History

2020: PNC Financial Services Group purchased BBVA USA Bancshares for $11.6 billion

In the middle of November, 2020 the Spanish finance corporation BBVA announced sale of the American business to PNC Financial Services Group banking group. The transaction is estimated at $11.6 billion. It is supposed that it will be closed in the middle of 2021.

According to Reuters, as a result of the transaction the bank with assets more than for $550 billion will be formed. The new banking institution will become the fifth in volume of assets in the USA. BBVA USA Bancshares (the American division of the Spanish corporation) with the headquarters in Houston (State of Texas) manages assets of $104 billion and has 637 branches in Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico.

The Spanish financial company BBVA sold the American business of PNC company for creation of the fifth in value bank in the USA

For acquisition of BBVA USA Bancshares the PNC company is going to use means which she received from investments in the international investment company BlackRock. In May, 2020 PNC sold the share (22.4%) in BlackRock company for $14.2 billion. The CEO of PNC William Demchak reported that the new transaction will allow to increase its profit by 21% in 2022 and to offset loss of income from passive investments in BlackRock. Purchase of assets of the Spanish group will allow PNC to increase a portfolio of deposits by $86 billion, and a portfolio of the credits - for $66 billion.

Reuters reports that BBVA made the decision to leave the American market after weak financial results negatively affected the share value of bank - since the beginning of 2020 their price fell off for 26%.

The transaction of BBVA and PNC will become the second in value acquisition in the banking market of the USA since financial crisis of 2008. The American business was estimated 1.34 times above its book cost. According to the results of the transaction BBVA will receive the amount which is nearly 50% of its market capitalization ($24.7 billion).^[1]

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