BBVA Sells CITIC Shares

News : Spanish financial services provider BBVA has confirmed that it is to sell US$1.27bn in shares in China's CITIC Bank , according to Reuters. The sale, which represents a cash loss of US$164mn, will see BBVA continue to hold a 9.9% stake in the bank. BBVA attributed its decision to sell to its plans to set up its own branch under its core brand name in the Chinese market.

BMI View: According to the Chinese government's own statistics, total social financing (TSF), which measures the aggregate liquidity that the financial system provides to the real economy, grew by 22.8% y-o-y in December, marking a 13-month high. After being on a downward trajectory from early 2010 to mid-2012, the indicator bottomed in May last year. As data are unavailable before 2002, the exact stock of TSF is unknown, and therefore so is its total growth rate. However, we estimate that it has expanded by almost 250% since the stimulus package was announced in November 2008. Despite the slowdown seen in recent years, TSF still rose as a share of GDP by 14 percentage points to 187% in 2012.

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Geography: China

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