Thursday, June 30

El Sabadell streamlines the sale of its car rental business in search of profitability


The president of Banco Sabadell, Josep Olin, presenting the entity's results.  |

The president of Banco Sabadell, Josep Olin, presenting the entity’s results. |
Terran Nader

He Sabadell Bank kicks off the 2021 financial year by stepping on the gas new strategic plan, designed to improve your efficiency and profitability. The fall in profits due to the impact of the covid crisis and the need to revalue its position after the fiasco of the merger with BBVA it has forced the entity to implement short-term changes that involve, in part, undertaking a series of divestment. With this, the Catalan bank with its headquarters in Alicante has prioritized an operation that consists of the selling your car rental business. The process, which has been in the making for almost a year, is now being streamlined and it is expected, according to sources close to Sabadell, to close the transaction during the first quarter of the year.

The entity chaired by Josep Olin It is willing to diversify its sources of income, but not through a sector that, in the vast majority of banks, is outsourced, focusing exclusively on the financial division involved in managing this vehicle rental contracts. The sale of Sabadell Renting it could mean, according to sources close to this market, an income of between 40 and 50 million euros.

Sabadell is being advised for this operation by AZ Capital and Cuatrecasas and, presumably, there are already at least three firms that have shown interest in assuming this asset. Is about Alphabet, a subsidiary of BMW; ALD Automotive, from Société Generale; and also Lease Plan, according to sources familiar with this market sector.

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The bank is currently immersed in a transformation process that has been accentuated since the end of last November when it broke up negotiations with BBVA due to the discrepancies between its management leaders regarding the price of the purchase transaction and, also, on the distribution of charges. The possibility of forging a merger that would have given birth to a new banking giant, in this case the second largest in Spain, was reflected in the stock market with days in which the Catalan bank based in Alicante experienced a stock market revaluation of up to 20% in just five days, as happened in early September. A growth that, however, collapsed when the Sabadell board of directors informed the National Securities Market Commission, at the end of November, of its divorce with the Basque bank in its attempted merger. The stock market reaction was immediate and resulted in a severe crash. The markets punished the break with losses of over 13% for the Catalan entity.

Divestments

That event was a turning point and forced Sabadell to publicize its new plans to improve profitability. He then announced that he was looking for a buyer for his British subsidiary, TSB, and left the door open to also get rid of the subsidiary in Mexico. All this to concentrate the focus on the national market. Likewise, it was pointed out that during the first quarter of 2021 its “efficiency and transformation” program would be expanded, with which it is expected to achieve annual savings of 115 million, mainly by cutting up to 1,800 jobs and cutting part of its territorial structure. All this while in its last quarterly presentation of results, made public in October, it pointed to a fall in profit of 74%, to 203 million euros, due to the negative impact of the covid.

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César González-Bueno, recently appointed CEO of Sabadell to replace Jagladiolaiola, will be in charge of piloting the new changes that are now taking off with the intention of selling the renting firm.


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