Bankinter has signed an agreement with Smart Holdco, an entity owned by funds managed by affiliates of Apollo Global Management, to acquire the banking operations of EVO Banco in Spain and its consumer credit affiliate in Ireland, Avantcard.
The deal does not include the purchase of EVO Finance, the group’s financial arm in Spain.
The deal is still pending approval from official bodies and regulators. The parties have agreed not to make the financial terms of the deal public, as the final price will be determined based on the number of customers and transferred balances and any excess capital once the deal is closed.
The acquired businesses will have a very limited impact on Bankinter’s capital of 99 million euros, or 29 basis points off the fully-load CET1 capital ratio at the end of June. At that time, this ratio stood at 11.55%; following the deal, it will fall to 11.26%, still well above the European Central Bank’s minimum requirements for Bankinter in 2018.
EVO Banco has 456,000 vastly digital customers, 229 employees and a balance of some 3 billion euros in deposits and 800 million euros in mortgages.
Moreover, the credit entity, Avantcard Ireland Limited, a consumer finance leader in Ireland, has 151,000 customers, 145 employees, 280 million euros in ‘revolving’ card and deferred payment receivables, and 66 million euros in personal loans.
This deal is centred on two businesses that the bank considers strategic (digital banking and consumer finance) and on different geographies (Spain and Ireland).
On the one hand, Bankinter Group aims to increase its commitment to digital banking, leveraging EVO’s brand value and the high growth potential of its customer base of mostly savers and, on average, young and substantially digital individuals in order to increase its market share in digital banking entirely in conjunction with its current operations.
Furthermore, acquiring Avantcard will enhance the Group’s consumer finance arm with a sound and promising portfolio, thus boosting the operations of one of its five business lines.
Acquiring Avantcard will bring in a sound, profitable entity that is also specialised in consumer lending and technologically advanced. Furthermore, Avantcard will benefit from the experience and know-how acquired by Bankinter Consumer Finance, the bank’s consumer lending subsidiary, through its operations in Spain and Portugal, which have afforded it the best growth figures amongst credit institutions in Spain.
In addition, this acquisition will geographically diversify Bankinter’s credit risk by expanding operations to another country in the EU and the Eurozone. Consumer finance is becoming the most international of Bankinter Group’s businesses, with operations in Spain, Portugal and Ireland.
Source: Company Press Release