TSB Sale Would Let BBVA Add Cash to Sabadell Bid, Analysts Say

Banco Bilbao Vizcaya Argentaria SA would be able to add cash to its hostile takeover bid for Banco de Sabadell SA if it sold Sabadell’s UK unit, according to Barclays analysts.

Divesting TSB Banking Group Plc “could allow BBVA to include a cash element of up to 10% of the offer with a limited incremental CET1 impact for BBVA’s shareholders,” analysts led by Cecilia Romero Reyes said in a note on Monday. “In the UK, BBVA with TSB would lack scale to pursue their strategy of growth, which intends to combine scale and profitability, and we think a sale could be well-received.”