FINANCIALS: BBVA-SAB: UK Clearance Immaterial; Deal Failure Negative For SAB

BBVA (BBVASM: Baa2 develop/BBB+/BBB+) has had the indirect acquisition of TSB in the UK cleared by regulators in London. Not credit material but a small step in BBVA’s potential takeover of Sabadell (SABSM: /BBB- pos/BBB). Any failure of this deal would appear a meaningful credit negative for Sabadell.

• The UK’s PRA has cleared the TSB takeover by BBVA, TSB being owned by Sabadell which the Spanish giant is bidding for. This clearance is one of the conditions of BBVA’s takeover, but it was widely expected to be granted (BBVA has effectively no retail market position in the UK).
• The Sabadell takeover deal remains on a very long timeline with Spain regulators and is the subject of meaningful political lobbying, we believe. The last update on timelines was at BBVA’s 1H24 results (31-Jul) which indicated Spanish competition clearance was still awaited and indications were that any shareholder vote wouldn’t be until 4Q24, at the earliest.