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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/jun/07/santander-banco-popular-rescue-oecd-growth-forecasts-business-live
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| Version 1 | Version 2 |
|---|---|
| Santander rescues Spain's failing Banco Popular from collapse - business live | Santander rescues Spain's failing Banco Popular from collapse - business live |
| (35 minutes later) | |
| 9.05am BST | |
| 09:05 | |
| SRB: Depositors are being protected | |
| Elke König, chair of Europe’s Single Resolution Board (which triggered Banco Popular’s rescue), says that the deal will protect the bank’s savers. | |
| König also argues that the deal vindicates Europe’s efforts to avoid another financial crisis. | |
| “The decision taken today safeguards the depositors and critical functions of Banco Popular. | |
| This shows that the tools given to resolution authorities after the crisis are effective to protect taxpayers’ money from bailing out banks”. | |
| Here’s the official statement: | |
| The Single Resolution Board adopts resolution decision for Banco Popular | |
| 8.42am BST | |
| 08:42 | |
| Back in the UK, the Halifax bank | |
| building society | |
| has reported that house prices rose by 0.4% in May. | |
| That ends a run of four monthly falls in a row, and means prices are 3.3% higher than a year ago. | |
| But prices were still 0.2% lower in the March-to-May quarter than in the previous three months, highlighting how the UK housing market has cooled. | |
| GBP Halifax UK house prices:Actual: +0.4%MMPrevious: -0.2% | |
| Updated | |
| at 8.58am BST | |
| 8.37am BST | 8.37am BST |
| 08:37 | 08:37 |
| Spain’s finance minister, Luis de Guindos, has welcomed Santander’s rescue of Banco Popular. | Spain’s finance minister, Luis de Guindos, has welcomed Santander’s rescue of Banco Popular. |
| In a statement, de Guindos says: | In a statement, de Guindos says: |
| “It’s a good outcome for the bank, given the situation it had arrived at in recent weeks, as it implies maximum protection for depositors and continuity of the bank’s operations” | “It’s a good outcome for the bank, given the situation it had arrived at in recent weeks, as it implies maximum protection for depositors and continuity of the bank’s operations” |
| He added that taxpayer money is not involved, and there is no danger of ‘credit risk contagion’ spreading to other banks. | He added that taxpayer money is not involved, and there is no danger of ‘credit risk contagion’ spreading to other banks. |
| 8.25am BST | 8.25am BST |
| 08:25 | 08:25 |
| Shares in Santander have dropped by 3% at the start of trading in Madrid. | Shares in Santander have dropped by 3% at the start of trading in Madrid. |
| That’s because investors are reacting to its plan to raise €7bn in new capital to fund its rescue of Banco Popular. | That’s because investors are reacting to its plan to raise €7bn in new capital to fund its rescue of Banco Popular. |
| Popular’s shares have been suspended, following their sale to Sandander | |
| Updated | |
| at 9.05am BST | |
| 8.15am BST | 8.15am BST |
| 08:15 | 08:15 |
| If Banco Popular is in such trouble, why did Santander buy it? | If Banco Popular is in such trouble, why did Santander buy it? |
| Popular’s attraction is its retail banking division, and its small business customers. They can bolster Santander’s existing business, and give it a larger share of the Spanish banking market. | Popular’s attraction is its retail banking division, and its small business customers. They can bolster Santander’s existing business, and give it a larger share of the Spanish banking market. |
| Bloomberg reporter Rodrigo Orihuela says: | Bloomberg reporter Rodrigo Orihuela says: |
| On the one hand, Popular has a very strong SME business and a very strong retail business, which is what Santander wants. | On the one hand, Popular has a very strong SME business and a very strong retail business, which is what Santander wants. |
| The real estate business is the big big question....Everyone will have to wonder whether Sandander can solve it. They probably have a plan. | The real estate business is the big big question....Everyone will have to wonder whether Sandander can solve it. They probably have a plan. |
| Here’s a video clip of Orihuela explaining the situation: | Here’s a video clip of Orihuela explaining the situation: |
| 👇 Here's some background to explain why Santander has bought Banco Popular for €1 https://t.co/JoyGmiGTBC pic.twitter.com/jMZcofglp2 | 👇 Here's some background to explain why Santander has bought Banco Popular for €1 https://t.co/JoyGmiGTBC pic.twitter.com/jMZcofglp2 |
| 8.08am BST | 8.08am BST |
| 08:08 | 08:08 |
| 8.03am BST | 8.03am BST |
| 08:03 | 08:03 |
| Why Banco Popular failed | Why Banco Popular failed |
| Banco Popular’s collapse into the arms of Santander today was primarily due to ‘toxic’ real estate loans on its books, and its failure to raise fresh capital. | Banco Popular’s collapse into the arms of Santander today was primarily due to ‘toxic’ real estate loans on its books, and its failure to raise fresh capital. |
| The bank made some seriously bad loans before the financial crisis triggered a major Spanish housing crash, and its management have been unable to fix the damage. | The bank made some seriously bad loans before the financial crisis triggered a major Spanish housing crash, and its management have been unable to fix the damage. |
| Back in February, Popular posted a €3.5bn annual loss due to bad debts, restructuring costs and various writedowns. Then in May it admitted that it was setting aside even more money to cover real estate losses. | Back in February, Popular posted a €3.5bn annual loss due to bad debts, restructuring costs and various writedowns. Then in May it admitted that it was setting aside even more money to cover real estate losses. |
| Its new chairman, Emilio Saracho, has been trying to sell assets and issue more shares to raise capital, but the market has proved unreceptive to his efforts. | Its new chairman, Emilio Saracho, has been trying to sell assets and issue more shares to raise capital, but the market has proved unreceptive to his efforts. |
| The crisis escalated in recent days, as a series of potential buyers dropped out of an auction to buy Banco Popular. With capital levels running dangerously low, and its shares in freefall, the ECB was forced to step in and trigger today’s rescue, to Sandander. | The crisis escalated in recent days, as a series of potential buyers dropped out of an auction to buy Banco Popular. With capital levels running dangerously low, and its shares in freefall, the ECB was forced to step in and trigger today’s rescue, to Sandander. |
| 7.56am BST | 7.56am BST |
| 07:56 | 07:56 |
| Karen Tso of CNBC points out that today’s rescue isn’t costing the taxpayer anything, because Santander will raise €7bn of new capital from the markets. | Karen Tso of CNBC points out that today’s rescue isn’t costing the taxpayer anything, because Santander will raise €7bn of new capital from the markets. |
| Another #bank bailout in Europe but this time the private sector steps in with @Santander to rescue Banco Popular | Another #bank bailout in Europe but this time the private sector steps in with @Santander to rescue Banco Popular |
| 7.53am BST | 7.53am BST |
| 07:53 | 07:53 |
| Nick Leeson, the rogue trader who broke Barings Bank in the 1990s, is struck by the symbolic price of today’s deal: | Nick Leeson, the rogue trader who broke Barings Bank in the 1990s, is struck by the symbolic price of today’s deal: |
| Banks are getting cheaper, Barings was £1, Banco Popular only €1 https://t.co/aNqq1OEaO8 | Banks are getting cheaper, Barings was £1, Banco Popular only €1 https://t.co/aNqq1OEaO8 |
| 7.42am BST | 7.42am BST |
| 07:42 | 07:42 |
| Banco Popular rescued from collapse by Santander | Banco Popular rescued from collapse by Santander |
| Angela Monaghan | Angela Monaghan |
| Breaking news from Spain: Banco Santander has bought Banco Popular for €1, rescuing its fellow Spanish lender from from the brink of collapse. | Breaking news from Spain: Banco Santander has bought Banco Popular for €1, rescuing its fellow Spanish lender from from the brink of collapse. |
| Santander said it would raise €7bn to cover the capital shortfall and strengthen the balance sheet of Popular, after the European Central Bank deemed it to be “failing or likely to fail”. | Santander said it would raise €7bn to cover the capital shortfall and strengthen the balance sheet of Popular, after the European Central Bank deemed it to be “failing or likely to fail”. |
| The ECB (which supervises the eurozone’s largest banks) triggered the move after concluding yesterday that Banco Popular was running out of cash. | The ECB (which supervises the eurozone’s largest banks) triggered the move after concluding yesterday that Banco Popular was running out of cash. |
| It says: | It says: |
| “The significant deterioration of the liquidity situation of the bank in recent days led to a determination that the entity would have, in the near future, been unable to pay its debts or other liabilities as they fell due. | “The significant deterioration of the liquidity situation of the bank in recent days led to a determination that the entity would have, in the near future, been unable to pay its debts or other liabilities as they fell due. |
| Santander said it was making the purchase after “a competitive sale process” to rescue the ailing bank. | Santander said it was making the purchase after “a competitive sale process” to rescue the ailing bank. |
| Popular lost more than half of its market value in recent days as investors grew increasingly fearful over its ability to deal with its capital shortfall. Moody’s downgraded the lender on Tuesday. | Popular lost more than half of its market value in recent days as investors grew increasingly fearful over its ability to deal with its capital shortfall. Moody’s downgraded the lender on Tuesday. |
| Details and reaction to follow.... | Details and reaction to follow.... |
| 7.30am BST | 7.30am BST |
| 07:30 | 07:30 |
| The agenda: OECD growth forecasts and Halifax house prices | The agenda: OECD growth forecasts and Halifax house prices |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| You have to take your hat off to Australia. Despite the economic challenges of the last decade, it has just racked up its 103rd successive quarter of growth - dating all the way back to 1991. | You have to take your hat off to Australia. Despite the economic challenges of the last decade, it has just racked up its 103rd successive quarter of growth - dating all the way back to 1991. |
| However, these latest growth figures aren’t too impressive. Australia’s economy grew by 0.3% in the first three months of this year, a little faster than Britain but slower than France or Germany. | However, these latest growth figures aren’t too impressive. Australia’s economy grew by 0.3% in the first three months of this year, a little faster than Britain but slower than France or Germany. |
| That means annual growth is now just 1.7%; the weakest since 2009. | That means annual growth is now just 1.7%; the weakest since 2009. |
| Bad weather is partly to blame, with some economists pointing to the disruption caused by Cyclone Debbie in Match. | Bad weather is partly to blame, with some economists pointing to the disruption caused by Cyclone Debbie in Match. |
| But others are concerned. Michael Workman, a Commonwealth Bank senior economist, says: | But others are concerned. Michael Workman, a Commonwealth Bank senior economist, says: |
| “The Australian economy began 2017 with a whimper following a decent pace of expansion in the final quarter of 2016.” | “The Australian economy began 2017 with a whimper following a decent pace of expansion in the final quarter of 2016.” |
| “The weakness in today’s data extends beyond the weather, and the slowdown in the domestic economy has occurred at a time when the global economic backdrop has improved. | “The weakness in today’s data extends beyond the weather, and the slowdown in the domestic economy has occurred at a time when the global economic backdrop has improved. |
| Here’s more details: | Here’s more details: |
| That sets the scene for this morning’s main economic event, the OECD’s latest assessment of the global economy. The Paris-based thinktank will update its growth forecasts, and highlight the key threats it sees ahead. | That sets the scene for this morning’s main economic event, the OECD’s latest assessment of the global economy. The Paris-based thinktank will update its growth forecasts, and highlight the key threats it sees ahead. |
| We’re not expecting much drama in the London markets today. The pound is hovering around the $1.29 mark, and the FTSE 100 is forecast to open unchanged. | We’re not expecting much drama in the London markets today. The pound is hovering around the $1.29 mark, and the FTSE 100 is forecast to open unchanged. |
| Oil remains volatile, though, as the diplomatic crisis in the region rumbles on. | Oil remains volatile, though, as the diplomatic crisis in the region rumbles on. |
| Here’s the agenda: | Here’s the agenda: |
| 8.30am BST: Halifax’s UK house price index for May | 8.30am BST: Halifax’s UK house price index for May |
| 9.30am BST: OECD releases its global economic outlook | 9.30am BST: OECD releases its global economic outlook |
| Updated | Updated |
| at 7.34am BST | at 7.34am BST |