Spanish bank stocks continue to be weak after the leaking/release of the draft MoU for the bank bailout. Bankia is the weakest for obvious reasons. POP is the next weakest, breaking below 1.60 EUR again today. More analysis of the MoU: http://www.acting-man.com/?p=18327 Reuters on the political aspect of writing down securities bought by Spanish voters: http://finance.yahoo.com/news/spain-banks-minimize-hit-small-153744870.html
Although it seems that POP might be safe from capital raisings (for the moment): "Four Spanish Banks Pass Capital Test " http://online.wsj.com/article/SB10001424052702303919504577520533374092946.html Europe's banking authority has found that four of Spain's largest banks have met new capital requirements, based on a preliminary review. The banks are Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA and CaixaBank SA and Banco Popular, according to a statement from the Spanish central bank on Wednesday. The findings were based on the banks' capital as of the end of June and the Bank of Spain said it doesn't expect any change to the European authority's assessment when its full accounting is completed in August.
"Eurogroup to approve Spanish banking sector bailout" http://uk.reuters.com/article/2012/07/20/uk-eurogroup-spain-idUKBRE86J01720120720 Spanish bank bailout MoU expected to be finalised today. Conference call planned for 11.00am UK time (6am New York) http://www.timeanddate.com/worldclock/city.html?n=136 *** "The plan is to formally endorse the draft as it stands," one euro zone official said of the conference call, which is due to begin at 11:00 a.m. British time. "All the rest will come later in the year, with the results of the bank-by-bank stress tests in September clarifying recapitalisation needs and paving way for restructuring plans to be drawn up in October, as set out in the timeline annexed to the MoU." *** The draft MoU can be found here: http://www.elitetrader.com/vb/showthread.php?s=&postid=3569712#post3569712
Short a small amount of BKIA and POP. Waiting for exact details of capital raisings (September) to short some more. In recent months I have been bought-in with short positions of both BKIA and POP, so I'm reluctant to take a big position for now.
Eurogroup statement on Spanish bank bailout https://twitter.com/FGoria/status/226292081373638656 http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/131914.pdf Euro Finance Chiefs Give Final Approval to Spanish Bank Rescue http://www.bloomberg.com/news/2012-...ve-final-approval-to-spanish-bank-rescue.html
Spain bank aid MOU https://twitter.com/lindayueh/status/226319342684499969 http://ec.europa.eu/economy_finance/eu/countries/pdf/mou_en.pdf
Spain capital requirements http://www.zerohedge.com/news/2012-...l-good-expected-live-press-conference-webcast Bankia 24.743 billion EUR Popular 3.223 billion EUR Oliver Wyman report (95 pages): http://www.scribd.com/doc/107614261/Wyman-Report Stress test details (19 pages): http://www.scribd.com/doc/107610453/Spanish-Stress-Test From the Oliver Wyman report: Popular is discussed on page labelled 71 (77 of 95) Bankia is discussed on page labelled 74 (80 of 95) **** Bloomberg article: http://www.bloomberg.com/news/2012-...illion-capital-deficit-under-stress-test.html which links to this PDF File for the stress tests: http://www.bde.es/f/webbde/SSICOM/20120928/presbe2012_41e.pdf
Information about the stress tests can also be found on the Bank of Spain web site: http://www.bde.es/bde/en/secciones/prensa/infointeres/reestructuracion/ In some of the government documents, the banks are split into different categories based on the type of government intervention required. These categories are listed here: http://www.bloomberg.com/news/2012-...ckroaches-with-bank-stress-test-as-bailo.html One group for banks that do not require additional capital: Group 0 (no capital required) Three groups for banks that require additional capital: Group 1 (those already "nationalized" such as Bankia) Group 2 (those with capital shortfalls that need state aid) Group 3 (those lenders deemed to be capable of covering cxapital deficits without government help) The next steps in the recapitalization process are described in the Bank of Spain press release of 17 September, titled "Roadmap for the banking recapitalization and restructuring": http://www.bde.es/f/webbde/GAP/Secc...ctorFinanciero/Archivo/Ficheros/mineco1en.pdf and possibly also in some of the documents released on 28 September. Group 1 banks' restructuring plans will be approved in late October or early November. Group 2 banks (might include Popular if it is deemed that they need state aid) must submit a restructuring plan "no later than October 2012". Group 3 banks (might include Popular if it is deemed that they can survive without state aid) must issue CoCos "no later than December 2012".
On 23 July, Spain implemented a 3-month short selling ban, that should expire on 23 October. http://www.zerohedge.com/news/spain-follows-italy-banning-short-selling http://www.scribd.com/doc/100814033/Spanish-Short-Selling-Ban "La prohibición se mantendrá por un periodo de 3 meses desde el momento de supublicación en la fecha de hoy y hasta el cierre del 23 de octubre inclusive,pudiendo prorrogarse o levantarse la prohibición si se considerase necesario." Google translate: "The ban will remain for a period of three months from the time of supublicación on the date of closing today until October 23 inclusive, may be extended or lifted the ban if deemed necessary."