Announcement with regard to the Notice of the Single Resolution Board of 2 August 2018 regarding its preliminary decision on whether compensation needs to be granted to the shareholders and creditors in respect of which the resolution actions concerning Banco Popular Español SA have been effected and the launching of the right to be heard process (SRB/EES/2018/132) (the ‘Notice’)

(2018/C 277 I/01)

By means of the Notice, the Single Resolution Board decides on a preliminary basis that it is not required to compensate pursuant to Article 76(1)(e) of Regulation (EU) No 806/2014 (1) the shareholders and creditors in respect of which the resolution actions concerning Banco Popular Español SA have been effected (‘Affected Shareholders and Creditors’). In order to take its final decision in this regard, the SRB launches the right to be heard process.

Summary of the Notice of the Single Resolution Board

On 7 June 2017, the Single Resolution Board (‘SRB’) adopted a decision concerning the adoption of a resolution scheme in respect of Banco Popular Español SA (‘Institution’) (2), which was endorsed by the European Commission (3). Pursuant to Articles 5 and 6 of that decision, the resolution action in respect of the Institution consisted in the application of the sale of business tool to transfer the shares in the Institution to Banco Santander SA (under Article 24(1)(a) of Regulation (EU) No 806/2014), following the exercise of the powers to write down and convert the capital instruments of the Institution (under Article 21 of that Regulation).

Following the implementation of the above resolution action by FROB, in line with Article 20(16) and (17) of Regulation (EU) No 806/2014 and Article 3 of the Commission Delegated Regulation (EU) 2018/344 (4), the SRB was required to ensure that a valuation is carried out by an independent valuer, for the purposes of assessing whether the Affected Shareholders and Creditors would have received better treatment if the Institution had entered into normal insolvency proceedings (‘Valuation of difference in treatment’ or ‘Valuation 3’).

Deloitte is the independent valuer hired to perform the required valuations in the context of the resolution of the Institution. On 14 June 2018 (5), the SRB received by mail Deloitte’s final report on the Valuation of difference in treatment in respect of the Institution’s resolution (‘Valuation 3 Report’), attached to the Notice as Annex 1.

It follows from the Valuation 3 Report that there is no difference between the actual treatment of the Affected Shareholders and Creditors and the treatment that they would have received had the Institution been subject to normal insolvency proceedings at the date of resolution. In view of the above, the SRB, in the Notice, decides on a preliminary basis that it is not required to pay compensation to the Affected Shareholders and Creditors pursuant to Article 76(1)(e) of Regulation (EU) No 806/2014.

In order for the SRB to be able to take its final decision on whether compensation needs to be granted, the SRB invites by the Notice the Affected Shareholders and Creditors to express interest in exercising their right to be heard regarding the above preliminary decision of the SRB, by following the consultation procedure and in particular by registering through a dedicated online form as described below.

The consultation procedure consists of two phases:

(i) First phase, during which Affected Shareholders and Creditors will be invited to express interest in exercising their right to be heard; and

(ii) Second phase, during which the Affected Shareholders and Creditors who expressed interest in exercising their right to be heard in the first phase, and whose status has been verified by the SRB, will be able to submit their comments on the Notice annexing the Valuation 3 Report.

Interested Affected Shareholders and Creditors are invited to express their interest in exercising the right to be heard by using a dedicated online registration form open until 14 September 2018 (12.00 noon, Brussels time). Any expressions of interest submitted through other means or after the expiry of the above deadline will not be taken into account.

More information about the Notice of the SRB and the Valuation 3 Report can be found on the SRB’s official website: https://srb.europa.eu/en/content/banco-popular

(1) Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ L 225, 30.7.2014, p.1).

(2) SRB/EES/2017/08 (OJ C 222, 11.7.2017, p. 3).

(3) Commission Decision (EU) 2017/1246 of 7 June 2017 endorsing the resolution scheme for Banco Popular Español S.A. (OJ L 178, 11.7.2017, p. 15).

(4) Commission Delegated Regulation (EU) 2018/344 of 14 November 2017 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the criteria relating to the methodologies for valuation of difference in treatment in resolution (OJ L 67, 9.3.2018, p. 3).

(5) A soft copy of the Valuation 3 Report was received by the SRB by e-mail on 13 June 2018. The attached Valuation 3 Report reflects the changes made to it by Deloitte’s addendum which corrected only clerical errors, as received by the SRB by e-mail on 31 July 2018.