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Shareholders vent anger as Banco Popular changes guard
February 20, 2017 / 3:57 PM / 8 months ago

Shareholders vent anger as Banco Popular changes guard

MADRID, Feb 20 (Reuters) - Small investors angry with the failure of Banco Popular’s outgoing chairman to clean up the bank’s books and its poor stock performance voiced their concerns at a shareholder meeting as he handed over power.

Popular, considered a weak link in Spanish banking due to its high exposure to troubled real estate assets, has seen a 53 percent decline in the last year, becoming the second worst banking stock on the European STOXX banking index. In the same period, this index has risen 25 percent.

Shareholders complained that outgoing chairman Angel Ron had left the bank with a non-performing loan ratio of 14.61 percent, the highest among Spanish banks in 2016.

Ron, who has been in charge for more than a decade, will be succeeded by Emilio Saracho.

“Banco Popular has behaved more like a savings bank rather than a proper well managed (private) bank,” said investor Miguel Vazquez Garcia, referring to institutions that had to be bailed out during the country’s banking crisis in 2012.

In 2016 Banco Popular posted a record 3.5 billion-euro loss and soured property loans eroded the bank’s capital position and cast doubt over its financial targets..

Retail investor Antonio Ramos said that the new chairman would need to take immediate action.

“Real estate assets have left us bleeding and drained all the capital, (the new management) will need to take bold actions because we are running out of time,” he told the meeting.

Ron had formally resigned before the meeting on Monday so was not present to reply to the criticism.

Deputy Chairman Roberto Higuera did not give any new financial targets during the meeting and said that any incoming strategy, including whether to pay dividends, would lie in the hands of Saracho, who is expected to be confirmed chairman by a separate board meeting later on Monday.

Under Ron, the bank was planning to hive off 6 billion euros of its property assets into a separate division to help reduce its non-performing real estate portfolio by 15 billion euros by 2018 but it remains to be seen how Saracho will proceed. (Additional reporting By Amanda Calvo; editing by Keith Weir)

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