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ECB advises CaixaBank to reduce Angolan bank stake after BPI acquisition

CaixaBank SA will sell off all or part of the 48.1% stake in Banco de Fomento Angola SA that it will acquire when it completes the planned buyout of Portugal's Banco BPI SA.

In the prospectus for its offer for shares in BPI that it does not own, the Spanish bank said it had received a non-binding recommendation from the ECB to gradually reduce its stake in the Angolan bank "within a reasonable timeframe."

BPI was required to divest a portion of its BFA stake after European authorities excluded Angola from a list of countries with regulatory regimes equivalent to those in Europe, leaving BPI at risk of breaching large-exposure limitations. The sale of a 2% stake in the Angolan unit to telecoms operator Unitel "will allow BPI to solve, in a satisfactory way, the situation of non-compliance of the large exposure risks, which was a situation that was seriously threatening BPI to be object of significant economic sanctions imposed by ECB," CaixaBank said.

The transaction left Banco BPI's and Unitel's respective stakes in the Angolan unit at 48.1% and 51.9%. CaixaBank noted that it does not have a specific plan for reducing its eventual stake in BFA, but said any potential divestment would have to comply with the shareholder agreement to which BPI is subject and comply with local banking rules.

CaixaBank launched its takeover Jan. 17, offering €1.134 a share for the 55% of BPI that it does not already own. The offer runs until 3:30 p.m. Lisbon time Feb. 7, and should shareholders representing 90% of BPI's share capital and voting rights accept the offer, CaixaBank will be entitled to launch a squeeze-out of remaining shareholders.

The Spanish lender said it hopes to achieve annual cost synergies of €84 million from the acquisition. The savings would come through layoffs of 900 employees and general cost cutting at the Portuguese bank.

Depending on the acceptance level of the offer, CaixaBank said its common equity Tier 1 ratio would fall to between 11.2% and 11.8%, relative to the 12.6% it reported as of Sept. 30, 2016.