Bidders for Florida's City National Bank should hope for better luck than that of its last buyer.
Miguel Blesa, a former executive of Caja Madrid, is in Spanish prison after being accused of arranging to buy City National at an inflated price. Blesa spent Thursday night in jail after failing to post a bail, the New York Times reported Friday. Blesa, who has not been charged with a crime, has denied wrongdoing.
An anticorruption group accused Blesa, Caja Madrid's former executive vice chairman, of purchasing City National without properly examining its liabilities. Caja Madrid paid $927 million for a majority stake in City National in April 2008, and the Miami bank's bad loans later caused Caja to absorb hefty losses, the report said. Caja Madrid later became part of Bankia, which was nationalized last year.
City National, which has since become profitable and well capitalized, is again up for sale. Bankia is nearing the sale of the $4.8 billion-asset lender to Brazil's Banco do Brasil for $900 million, Bloomberg reported last week.
A March report identified Toronto-Domnion's TD Bank (TD), BB&T (BBT), PNC Financial (PNC), Banco Popular (POP) and Banco Sabadell (SAB) as potential bidders. Bankia said in November that a bailout agreement with the Spanish government and the European Union would force it to sell the Miami bank.