Chase Selling Operations In Spain to Caixa Geral
NEW YORK - Chase Manhattan Corp. announced Monday that it has agreed to sell its retail and leasing operations in Spain to Portugal's Caixa Geral de Depositos.
The purchase price was not disclosed, but analysts estimated that Chase's Spanish operations would fetch about $23.6 million. The unit has about $585 million in assets and employs 400 people in 15 offices.
Chase also disclosed that it had reached a preliminary agreement to sell its Madrid headquarters to Spain's Fierro Industrial Group for an undisclosed amount. The company said it plans to retain its corporate banking operations in Madrid and Barcelona.
Part of a Restructuring
The sale of Chase's Spanish retail and leasing operations is part of a worldwide restructuring to cut $300 million in operating costs by closing or selling unprofitable operations. It has been steadily retreating from consumer banking overseas, focusing instead on private banking, securities custody, and corporate finance.
Chase does not disclose earnings for individual overseas units, but the company has lost $124 million from its operations in Europe, the Middle East, and Africa during the past three years. Sources said the Spanish operations lost about $5 million last year.
As part of its restructuring, Chase has sold units in Holland and Belgium, its branch in Lyons, France, and its Paris headquarters. It also has closed its Helsinki branch, consolidated four German branches into one, and withdrawn from securities underwriting and trading in Switzerland.
Several Offices Retained
Chase still has offices in Austria, France, Germany, Luxembourg, Norway, Italy, and the United Kingdom.
Profits at U.S. and other foreign banks in Spain have come under pressure as Spanish banking authorities have deregulated the market.
"Competition in the Spanish market is very intense," said Luis Javier Bastida, general manager of Banco Bilbao Vizcaya, Spain's biggest bank.
"There are no restrictions any more on interest rates, branches, or the products that you can sell."
Several U.S. banks have recently shut down or said they plan to close their Spanish banking units, including First Interstate Bancorp, Chemical Banking Corp., Continental Bank Corp. and First Chicago Corp.
Only Citicorp and Manufacturers Hanover Trust Corp. retain major operations in Spain.
Caixa Geral, Portugal's largest bank with $18 billion in assets, last month acquired Banco de Extremadura, a unit of Spain's Banco Bilbao Vizcaya.