The resulting entity would be chaired by José Ignacio Goirigolzarri, current president of Bankia, while Gonzalo Gortázar, current CEO of CaixaBank, would occupy the same position in the new company.
The CEO of Bankia, José Sevilla, already pointed to a possible merger in the face of the pandemic in the last presentation of the bank’s results in July. “There are certain incentives for mergers. We will see it in the next few months.
There is a broth of fusions ”, were his words. For his part, Goirigolzarri, in an interview with EL PAÍS last June, assured: “As long as profitability is permanently low and there are no growth possibilities, mergers are an incentive.
As the pan-European ones are very complex, you look at the national ones. Can you have a merger? Yes, but we are not in it and less with this crisis. It is a way to be more efficient, but it also has a management risk. If the merger is done wrong, it becomes a problem as it was seen in this house years ago ”.
The merger must have the approval of the Government because not in vain the Fund for Orderly Bank Restructuring (FROB), through which the State owns the stake in Bankia,It depends on the third vice president and minister of Economic Affairs, Nadia Calviño.
“The FROB team is constantly analyzing market conditions in order to protect the public interest of the participation in Bankia. Naturally, the Ministry of Economic Affairs and Digital Transformation has frequent contact with the main financial entities in the country. In th
e event that these conversations and studies conclude in a proposed merger agreement, the FROB will analyze them with complete objectivity from the perspective of generating value and optimizing its ability to recover aid ”, indicated sources from the Ministry.
The same sources added that “the Government has a priority in relation to Bankia: protecting the general interest of Spanish citizens, maximizing the value of public participation and strengthening the country’s financial stability. These are the principles that will guide any decision in this area ”.
With the eventual merger of CaixaBank and Bankia, both entities would resume the attempt they made in 2012 when Isidro Fainé and Rodrigo Rato, who headed both entities, failed to succeed in an attempt frustrated then by political issues and discrepancies in the command hierarchy .
For CaixaBank, this would be the second corporate operation in three years, after the integration of the Portuguese BPI culminated in 2018, and during the last crisis, it absorbed Caixa Girona, Banca Cívica and Banco Valencia.
CaixaBank has a total of 4,460 branches and 35,600 employees, while Bankia currently operates with a network of 2,250 branches and some 16,000 employees. In the first semester, the Catalan entity earned 205 million euros (67% less than a year earlier), while the old Madrid savings bank obtained a net profit of 142 million, 64% less.
The synergies originated by the merger could allow large cost savings in a context in which large banks have tried to put a firewall in the face of the crisis in the form of write-offs and provisions: the six large Spanish entities accumulate 14.7 billion euros in the first six months of the year, reserves that caused the massive reduction in benefits.
And in which the critical mass has become more and more timely given the long horizon of low interest rates that has dragged on since the previous crisis and that forces us to maintain the current one.
The stock market crash that both entities have suffered due to the economic impact of the coronavirus is not trivial either. CaixaBank has dropped 37% so far this year, while Bankia has lost 47.2% of its market value. At the closing price of the session on Thursday, the State’s stake in Bankia does not even reach 2,000 million euros.
This same week, the Vice President of the ECB, Luis de Guindos, emphasized the problem of maintaining high structural costs in the current pandemic situation, which will reduce profit margins below 2% this year and around the 3% next when having to increase provisions. “Bank consolidation can be a useful instrument for that and it should be done relatively quickly and urgently,” he said.