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BANKING

Spain’s CaixaBank launches takeover of Portugal’s BPI

Spain's CaixaBank on Monday announced its second takeover bid in just over a year for the 56 percent of Portugal's fourth-biggest bank BPI that it does not already control.

Published: 19 April 2016 09:18 CEST
Spain's CaixaBank launches takeover of Portugal's BPI
CEO Gonzalo Gortazar is confident of the takeover. Photo: Josep Lago

Barcelona-based CaixaBank said in a statement it would offer €1.113 in cash per share, an offer which values the Portuguese bank at €1.62 billion ($1.83 billion).

Spain's third-biggest lender said the offer was conditional on obtaining over 50 percent of BPI's share capital and the Portuguese bank lifting a 20 percent cap on shareholders' voting rights.

The bid comes just a day after BPI announced that its talks with Angolan investor Isabel dos Santos over the sale of her stake in the Portuguese bank had broken down.

Dos Santos, the daughter of Angolan President Jose Eduardo dos Santos, owns 18.6 percent of BPI through holding firm Santoro Finance. Angola is an oil- and diamond-rich former Portuguese colony.

CaixaBank was seeking to buy Santoro Finance's stake in BPI in a deal which would see Isabel dos Santos end up with BPI's controlling stake in Banco de Fomento Angola (BFA), Angola's most profitable bank.

Under new rules by the European Central Bank (ECB) exposure to Angolan credit and debt must by fully provisioned and BPI could face daily fines if it fails to cut its exposure to the African country.

CaixaBank, which first invested in BPI in 1995, had tried to buy BPI in February of last year, but it withdrew its offer after Isabel dos Santos refused the lifting of the cap on shareholder voting rights.

The cap has allowed Santoro Finance, BPI's second-largest shareholder, to block CaixaBank's plans even though it is the Portuguese lender's biggest shareholder.

Presidential decree

Portugal's centre-right President Marcelo Rebelo de Sousa on Monday approved a decree which bans limitations on voting rights that exist at eight Portuguese banks.

The decree, which was passed last week by Portugal's Socialist-led cabinet, will come into force on July 1st.

“The conditions have been met on the issue of separating BPI and BFA and for a reduction in the weight of BFA in BPI to be achieved with success very quickly,” Portuguese Prime Minister Antonio Costas said Monday while on a visit to Paris.

The ECB had given BPI until April 10 to reduce its exposure to Angola.   

CaixaBank appealed to the ECB in its statement to give BPI more time to meet the new rules on provisions.

The Spanish bank's latest offer for BPI is lower than the offer of 1.329 euros per share which it made in February 2015.   

It is also lower than BPI's closing price of 1.191 per share on April 8th when trading in the lender was suspended.

But CaixaBank said its current offer represents the average share price of BPI over the past six months.

CaixaBank shares closed down 2.99 percent at €2.60 on a day which saw the Ibex-35 index of most-traded Spanish shares close up 0.35 percent.

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BANKING

Card over cash? Why Germany is seeing a new payment preference

Cash has long been king in Germany, with many smaller retailers refusing to join the rest of the world in adopting contactless payment systems. But card-based payments are on the rise, as recent stats about Girocard use reveal.

Published: 13 February 2024 12:31 CET
Card over cash? Why Germany is seeing a new payment preference

Germany has long been a very cash-based country, occasionally to the dismay of frustrated tourists at the Döner shop.

A few German phrases express the people’s love of physical money. There’s ‘only cash is true’ – Nur Bares ist Wahres. Or Bargeld lacht, literally meaning cash laughs, but used to imply that cash is what’s wanted, similar to ‘cash is king’ in English.

But the classic German preference for cash appears to be evolving, as the use of girocards is growing, even for small transactions.

How are girocards being used?

Girocard, an ATM and debit card service offered by German Banks, was designed to allow customers to use virtually all German ATMs and, increasingly, to make purchases at businesses.

READ ALSO: Ask an expert – Why is cash still so popular in Germany, and is it changing?

Last year, consumers in Germany used their Girocard more often than ever before for cashless payments. A total of €7.48 billion payment transactions with the plastic card were counted – 11.5 percent more than in the previous record year 2022, according to figures published by the Frankfurt-based institution Euro Card Systems.

Whether at the bakery, petrol station or supermarket, customers are increasingly pulling out their cards at the checkout, even for smaller amounts. As a result, the average amount paid with the Girocard fell from €42.34 to €40.69 within a year. 

The rise of card payments in Germany

Contactless payment, which is possible with girocards and credit cards that have an NFC chip, got a boost during the Covid pandemic, as retailers promoted it for hygiene reasons. 

But the use of card payments has continued to grow in Germany since then, boosted partly by the increasing use of girocards.

Promoting the use of girocards, some German banks have expanded their cards’ functions: Sparkassen, Volksbanken, or Raiffeisenbanken offer girocards for the digital wallet, for example.

Banks want to continue upgrading the payment card with further applications. For example, a project is being tested which would add an age verification function to girocards that would be useful when a customer is buying cigarettes.

On the retail side, it’s clear why the Girocard is preferred to other debit options.

“We see that debit cards from international providers cost up to four times more,” Ulrich Binnebößel, Head of the Payment Systems & Logistics Department at the German Retail Association (HDE) told DPA.

What’s the difference between the Girocard and other debit?

The Girocard is a strictly German phenomenon. It can be seen as the latest iteration of the EC card, which was created to consolidate payment systems following the unification of former East and West Germany.

In 1991 different debit card systems, including Eurocheque guarantee cards from former West Germany and Geldkarte ATMs from former East Germany, were unified into Eurocheque cards.

Then in 2001, the Eurocheque system was disbanded, but German banks continued to use the EC logo for “electronic cash’” cards, or EC cards. In 2007, the German Banking Industry Committee introduced Girocard as a common name for electronic cash and the German ATM network.

Girocards are only issued and accepted in Germany, so if you want to get one of your own, you’ll have to join a German bank, and shell out those notorious German banking fees.

READ ALSO: Why it’s almost impossible to find a free bank account in Germany

Alternatively, you can get by with internationally accepted debit cards provided by a bank in your home country, or otherwise by joining an app-based European banking service like N26. 

But be warned, without the Girocard in hand, at some smaller retailers you may be told, “Leider nur Bargeld oder EC-Karte.”

With reporting by DPA

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