“MADRID—Berkshire Hathaway Inc. BRKB -0.34% will pay CaixaBank SACABK.MC +0.89% €600 million ($778.7 million) for the future cash flow from a portfolio of life insurance policies, the Barcelona-based bank said Friday, a rare dip into a fiscally stressed euro-zone country for the investment firm run by Warren Buffett.
CaixaBank—a lender that, like many of its Spanish competitors, has large insurance operations—said the reinsurance agreement will result in a one-off gain of €524 million for the bank, reinforcing its capital core.
A spokesman said the bank contacted a number of reinsurers on the possible deal after the summer. CaixaBank will continue handling the policies, the spokesman said, adding that the deal will have no commercial impact on its insurance operations.
CaixaBank is one of Spain’s strongest banks, but its operations have been hurt by the collapse of the country’s real estate market nearly five years ago. The ensuing economic crisis resulted in a decrease of new lending by the bank and the depreciation of its asset portfolio, including a stake in oil firm Repsol REP.MC -0.90%.”
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