two fusions, two worlds (Albert Martín)

It had been a few minutes since ARA announced the news that CaixaBank and Bankia were finalizing the merger when a message reached all newsrooms across the country: the future entity would have a coexistence of headquarters in Barcelona and Madrid. And the new CaixaBank would have as president the top executive of the small entity, José Ignacio Goirigolzarri.

Yesterday, 48 hours after the announcements from BBVA and Banco Sabadell to the market regulator announcing that they were negotiating the merger, the workers of the two entities had not received a single reassuring message for their future. The economic meaning of these operations is to acquire the customers of the small entity with only a part of its employees, and analysts have warned that this particular merger will be especially bloody in terms of employment, due to the strong presence of BBVA in Catalonia. According to CCOO, the majority union in the two banks, the Catalan entity has 6,450 employees in the Principality, for 5,200 the bank of Biscayan origin.

The lack of reassuring messages for the small bank in the operation – Sabadell – contrasts sharply with what CaixaBank did. So far, some voices in the sector point out that BBVA will continue some of Sabadell’s central services, but it is not clear what size it is being talked about. And although it is less likely, there is also speculation that Jaume Guardiola, number two in the Catalan bank, may have this same role in the resulting entity. But for now they are just rumors that none of the parties involved confirm.

“CaixaBank was generous; I have seen mass dismissals of absorbed bank executives, and in this case they have been given by the president, ”explains a financial source regarding the fate of Bankia. The Catalan entity, in an operation carried out by Isidre Fainé, President of La Caixa, also expects Bankia’s central services in Madrid to continue to play a leading role.

Financial sources explain that the operation soft CaixaBank also has a political background that needs to be understood. Bankia is owned by the state through the FROB, which should not be forgotten. And in many environments there is still an atavistic resistance to admitting that a Catalan company can acquire one from Madrid, as was seen in Gas Natural’s attempt with Endesa.

A more pronounced urgency

Another of the differences between the two mergers is when they were raised. The move served CaixaBank to anticipate a difficult situation, and in no way was it in a desperate moment. Neither was Bankia, which enjoys very high solvency thanks to the public aid it received in its day.

The latest merger is very different. “It arrives too late and now it was forced,” say financial sources referring to the fall in the stock market of Sabadell. “And therefore the situation is very different: here is one that pays and one that is needed,” they add.

There is also another difference between the two mergers: that of CaixaBank was announced when the talks were already advanced and that of Sabadell is greener. Just yesterday, BBVA’s CEO, Onur Genç, was trying to cool it down, pointing out that there is no guarantee that an agreement will be reached. But some voices correct him: “At this point someone has to deal with Sabadell, and BBVA knows it.”

“Unlike the merger of CaixaBank and Bankia, no party here is very excited at the altar,” reflects another voice in the sector. “And what is being seen is explicit: formally it may be a merger, but the execution will be a pure and simple purchase.”

The Bank of Spain calls on banks not to drop in provisions

In the midst of a merger, the Bank of Spain warned institutions yesterday that 2021 will be a difficult year in economic and delinquency terms, and that they must prepare to face it.

The regulator, in the voice of the deputy governor, Margarita Delgado, stated that it does not consider it “prudent” for banks to reduce provisions (money for future needs) during the third quarter of the year.

Since the pandemic broke out, the entities have accumulated a combined mattress of 21 billion in provisions, but of these, only 3,180 belong to the third quarter.

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