BBVA has exercised its right of first refusal to buy back 662 branches, which it sold between 2009 and 2010 under a sale and lease back agreement to Tree Inversiones Inmobiliarias (currently owned by Merlin).
This deal gives the bank greater flexibility in the management of its network of offices in Spain - as it resumes ownership - and generates significant economic savings between now and the date the agreement is set to end in 2040, despite increasing inflation (the current contract includes a clause according to which rental incomes are adjusted annually at 1.5 times the inflation rate).
BBVA has agreed to pay 1.99 billion euros for 100% of the shares of Tree Inversiones Inmobiliarias, which owns the properties (659 branches and three individual buildings), in a transaction that is estimated to have an initial capital consumption of -7 basis points. It is also expected to generate an initial net impact on the income statement of approximately -200 million euros, once the transaction is completed, which is forecasted to be at the end of the second quarter. These impacts will be more than offset by the cumulative savings expected when this transaction is executed.