They were, until now, the third and fourth in that country. The economic crisis due to the coronavirus accelerated the plans. The effects for Argentina.
The largest bank in Spain is about to be born. Its creation, which is approved this Thursday, is the result of a historical fusion, accelerated by the economic crisis that the coronavirus is causing, between CaixaBank, the third largest Spanish bank, and Bankia, the fourth, and whose main shareholder is the State.
The boards of directors of the two financial institutions meet this Thursday to close the final agreement of the new bank that will be the number one in Spain in assets: more than 650 billion, a figure that It will make it the 10th bank in Europe.
The giant will be named CaixaBank and will be based in Valencia, the city to which the Catalan entity moved after the failed attempt to declare independence in Catalonia and the political crisis that broke out due to the illegal self-determination referendum that the Generalitat government carried out in October 2017.
“To understand this merger we should start from the financial crisis of 2008 in Spain, which caused a catastrophe in the sector and for which almost all savings banks disappeared, merged or were converted into banks,” he puts in context for Clarion Argentine economist Federico Steinberg, researcher at the Elcano Royal Institute and professor at the Department of Economic Analysis at the Autonomous University of Madrid.
“All these restructurings received European funds and that was also the case of Bankia, which was the old Caja de Madrid: it had a European bailout and merged with a few smaller ones,” Steinberg explains. On the other hand, La Caixa, which did not need a rescue, was transformed into a bank and became CaixaBank. “
Bankia currently has about 16,000 employees and 2,267 branches. Some 35,600 people work at CaixaBank in 4,460 branches.
The new entity will have more than 51 thousand employees and more than 6,700 branches, some of which are expected to disappear.
“The negative short-term impact of the covid, the low interest rates, the delinquencies and the new challenges due to the competition from banks based on new technologies, take away business from financial institutions that are in a very difficult situation. difficult because of the structure they have, based on offices and personnel ”, he underlines Clarion Santiago Carbó, Professor of Economics at the University of Granada and Director of Financial Studies at the Funcas economic research and analysis center.
The European Central Bank welcomes this and other future mergers that aim to revitalize the financial sector of the euro zone so that its banks are more competitive.
“Cost adjustments and consolidation have become much more essential due to the crisis. Mergers can be useful at the national and cross-border level. This consolidation should be carried out quickly and urgently ”, said the vice president of the European Central Bank (ECB), Luis de Guindos, who was Minister of Economy during the government of Mariano Rajoy.
The pandemic also sponsors a brutal fall in the Spanish Gross Domestic Product. The Bank of Spain estimated this Wednesday that this decrease could be around 12.6 percent according to the epidemiological situation that Spain must face due to the outbreaks of covid.
“Within the banking sector of the European Union there is a proposal for the existence of large European banks, as there are in the United States,” says the Argentine economist Steinberg. That large trans-European banks are being created, which there are not many, because there are still certain imperfections in the banking union and in the domestic regulatory elements. “
In respect of the blows that this unprecedented merger could have in Latin America and, in particular, in Argentina, Professor Carbó believes that it could affect the presence of foreign banks in our country.
“Banks are looking to earn assets denominated in euros. They are not so interested in currencies from other countries that they generate a lot of headaches when they depreciate, says Carbó. European and Spanish banks are clear about this: “We are going to win if we integrate and win in euros.” I am not saying that they are going to divest in Latin America but they are going to boost operations here in Europe. “
The merger generates controversy. Because it involves the public bank and questions its role. Because in the Spanish imagination of recent years, permeated by Catalan independence demands, thinking of joining a bank in Madrid with another in Catalonia is almost a sacrilege.
“We are talking about the bank of Madrid and the bank of Barcelona, with all that that implies from the symbolic level”, admits Steinberg.