The two leading shareholders of CaixaBank, La Caixa Banking Foundation holding 30.012% and the State with 16.1177%, are preparing to choose their path in the coming months. They must decide whether to push for a larger majority in the financial group or to divest a small stake to fund a share buyback that brings them closer to today’s ownership levels. The ongoing process of repurchasing shares, driven by CaixaBank, will shift the stake of key holders such as Isidre Faine and the public Fund for Regular Bank Restructuring FROB to a higher, albeit capped, level. Analysts anticipate the move to land around a maximum of 33.3% for La Caixa and 17.9% for the State, with a decision expected by year-end or early next year, and then a concrete course of action will be announced.
The Ministry of Economy has the issue on its agenda but has not ruled on it until the bank completes its redemption of the acquired securities. In the coming months, officials led by Nadia Calviño are monitoring developments. The government has an incentive to lift its stake in CaixaBank without injecting additional public funds, signaling a higher dividend yield in the bank’s future years. The division of duties in the management ranks reinforces the idea that the bank might see growth in its value before the end of the current legal window for exit strategies that remains available through 2023, or potentially into 2024, as part of a broader recovery plan.
On the other hand, lowering the state’s stake would involve selling part of the holdings, which would translate into reduced future dividends and a potential impairment of the valuation. This is not tied to the Bankia merger foundations, whose stock price rose substantially since the 2012 nationalization, though it does reflect the earlier baseline value of Bankia shares. The strategic intention behind a sale centers on demonstrating that the state is not increasing its touch with a private bank, yet the government’s economic rationale often weighs more heavily against the political optics than on the concrete financial gains. The overall objective remains to preserve as much public value as possible, particularly in light of earlier injections that helped stabilize the group during the restructuring era.
Maintaining a floor at 30 percent
La Caixa Banking Foundation is taking a cautious stance, awaiting the outcome of discussions led by José Ignacio Goirigolzarri and Gonzalo Gortázar regarding the completion of the share repurchase and redemption plan. Even if a partial sale occurs, CaixaBank intends to maintain its stake above the 30 percent mark, following the 2013 banking foundations law that creates a special regime with tax advantages for those holding a threshold level of shares in their bank. This framework shapes both the timing and the scope of any further movements by the major shareholders.
Both anchor shareholders are expected to reconvene and reassess their positions in the coming years. The option remains open for another series of buybacks if capital remains above a safe threshold after the ongoing adjustments. The intent is to sustain a robust capital cushion while optimizing distributions to owners through measured financial actions rather than aggressive expansion through equity dilution.
Accelerated execution
Share repurchases have gained traction across the banking sector as a strategy for returning capital to owners in a market where stock prices have often lagged due to the environment of flat or negative interest rates. CaixaBank recently announced a buyback with a maximum value of 1.8 billion euros, aiming to reduce a portion of its capital to reflect the holdings of the foundation and the State. The program is designed to run for up to twelve months, with the bank seeking to complete the process within the current year. In a short window, the bank appointed Morgan Stanley to manage the buyback, and the actions undertaken in late spring show a rapid pace, with several hundred million euros already repurchased as part of the overall plan.
In financial terms, a buyback is a device in which a company repurchases its own shares. By diminishing the number of outstanding shares, the stake of remaining investors rises proportionally. This can lift the stock price due to increased demand during the buyback window and enhance earnings per share by spreading profits over fewer shares. Unlike dividends, buybacks do not generate an immediate tax consequence for investors who do not sell their shares, making them a favored mechanism during periods of subdued market returns.