No joy for Banco Popular investors

BANCO POPULAR shareholders and creditors learnt on November 22 that they will not receive compensation of any kind.

The European Single Resolution Board (SRB) approved the rescue and acquisition of the failing Madrid-based bank by Santander for a symbolic €1 six years ago.  Although shareholders and some bondholders took losses, the deal avoided the use of public money while maintaining financial stability.

On June 7, 2017, Banco Popular had a stock market value of approximately €1.3 billion, while around €1.9 billion of subordinated and convertible bonds were written off.

Nevertheless, both Brussels and Madrid welcomed the deal as a test of bail-in rules, with investors and creditors bearing the brunt in a bank rescue.

In 2020, the SRB argued that Banco Popular shareholders and creditors were not entitled to compensation as they would not have received better treatment had the bank gone into liquidation.

Shareholders including Mexican businessman Antonio del Valle, lodged an appeal against this decision with the EU’s General Court.  This has now been turned down but he and other shareholders and investors were given two months and 10 days to raise an appeal to the European Court of Justice.