Bankinter to Transfer Linea Directa

Bankinter has announced plans for its insurance subsidiary, Linea Directa (LDA), to become an independent publicly traded company. The transaction will have a marginal positive impact on capital ratios. Nevertheless, the Bank will also lose an important source of revenues. LDA contributed to 18% of Bankinter´s net attributable income in 9M19.

Key highlights of the commentary include:

• Bankinter announced a proposal to transfer Linea Directa Aseguradora shares to its shareholders via an in-kind dividend.
• The transaction is expected to have a marginal positive impact on capital.
• Nevertheless, we view the transaction as negative for Bankinter´s earnings power, business mix and internal capital generation.

“We view the transaction as negative for Bankinter´s earnings power, business mix and internal capital generation. After the transaction is closed, Bankinter will lose an important revenue source which provided support to revenues, especially during economic down-turns. Nevertheless, the transaction will have no impact on Bankinter´s regulatory capital, and the Bank has improved its revenue diversification in recent times” said Pablo Manzano, Vice President - Global Financial Institutions Group, DBRS Morningstar.

The full commentary, titled “Bankinter to Transfer Linea Directa” can be found on dbrs.com.

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