The bailout of the Spanish bank Banco Popular, which is seen as the first full-scale test of the European banking resolution instruments and has attracted broad media attention, may end up being the subject of legal proceedings.
On 17 August, three of the largest creditors of Banco Popular - Algebris, Anchorage Capital Group and Ronit Capital - brought a complaint to the Court of Justice of the European Union against the European Commission and the Single Resolution Board, calling for the bailout plan and sale of the bank to Banco Santander to be scrapped.
Certain aspects of the regulation process are at issue, including the speed with which the bank ran out of emergency liquidity. According to Reuters, investors have called for clarifications on the Single Resolution Board's decision to intervene and are even reported to have accused it of making the bank's situation worse with various statements made upstream of the plan.
This complaint comes on top of proceedings already filed by several Spanish associations representing small shareholders, including AEMEX and ADICAE, and a group of Mexican investors, Les Echos reports. According to the organisation Better Finance, more than 6,000 individual shareholders have filed complaints.
AEMEC argues that certain fundamental rights of the shareholders, such as private property, have been breached. According to Better Finance, the association is demanding damages of €1.85 for each share sold to Banco Santander for €1 at the time.
ADICAE, for its part, invokes a lack of transparency, particularly the absence of clear public evidence that the bank was no longer viable. In a press release dated 31 July, it expressed the view that Banco Popular's resolution had been decided upon in haste and incautiously.
Green light to acquisition of Banco Popular Espanol by Banco Santander
This latest complaint comes in the wake of the European Commission's clearance, on Tuesday 8 August, of the acquisition of Banco Popular Espanol S.A. by Banco Santander.
Both banks provide commercial banking, retail and wholesale investment services and insurance services in Spain and Portugal. Following its investigation, the European Commission concluded that the acquisition would not distort competition within the European Economic Area (EEA). It found that the combined market shares of both companies is generally limited and that there are several powerful competitors on the market. It therefore approved the acquisition plan, notified to it on 14 July of this year.
This decision follows one of 7 June (see EUROPE 11803), in which the Commission approved the resolution procedure for Banco Popular on the basis of a proposal of the Single Resolution Board (SRB), the day after the European Central Bank (ECB) announced that the bank was “failing or likely to fail”. The resolution plan was followed by the transfer of all of Banco Popular's activities and subsidiaries to Banco Santander. (Original version in French by Marion Fontana and Lucas Tripoteau)