September 26, 2020

Caixabank and Bankia study their merger with Goirigolzarri as president


Madrid

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Caixabank and Bankia are studying their merger, as both entities confirmed yesterday to the National Securities Market Commission (CNMV). More than just initial conversations. And if they came to fruition, they would not take two weeks to close the operation. But … fringes are still missing. Of course, with the ban on corporate financial operations open, several possibilities for union in the sector are looming. That of the Catalan entity and the nationalized one would be the first bank merger of the stage Covid-19, between the third and fourth Spanish financial institution. If the negotiations finally bear fruit, we would be facing the creation of the first bank in the country by assets, with more than 650,000 million euros and with 6,600 branches.

However, until last June, all the pools gave Banco Sabadell a firm candidate to be the travel companion for Bankia, but at that time the operation did not finish taking shape. Now, after a negotiation that remains open, the bank, owned 61% by the State through the FROB, is in a position to join Caixabank.

Of this consolidation process, according to financial sources familiar with the talks, the visible head would be that of José Ignacio Goirigolzarri, current leader of Bankia. This would be the president of the resulting entity in case the union ends successfully, while the CEO would be Gonzalo Gortázar, current second at Caixa. Sources consulted by ABC assure that the lack of harmony between the president of the La Caixa Banking Foundation – from which the Catalan bank “hangs” -, Isidro Fainé, and the current president of Caixabank, Jordi Gual, has led to this decision. The headquarters would be in Valencia.

The sources point out that the disagreements between Fainé and Gual – more political than business – nevertheless had their peak and decisive point last spring with the announcement of Caixabank to halve the dividend distribution, from which the Welfare Projects draws, as a result of the pandemic.

Remember that this would nevertheless be the second time that Caixabank and Bankia are considering merging. In 2012, the then president of the Catalan entity, Isidro Fainé and the former president of Bankia, Rodrigo Rato, tried it.

The same sources explain that it would be a merger that would have the approval of the regulators. A way to strengthen itself in the face of the pandemic caused by Covid-19 that would have the approval of both the Bank of Spain and the European Central Bank (ECB). In fact, the vice president of the latter institution, the former Minister of Economy with Rajoy, Luis de Guindos, has been reiterating since before the summer, and more firmly this week, that a consolidation process was urgently needed; not only in Spain but at the European level.

Thus, other financial sources go a step further and emphasize that this could be only the first phase of a much larger operation in which the third party would also come into play: Sabadell Bank, before problems not of solvency or liquidity of the Catalan bank, but of listing and attractiveness for capital. Although other financial experts assure that Sabadell is already in the spotlight of the BBVA. When one moves, the balance is altered and the dance begins. All the pieces of the board are in play.

The State also enters this dance of names due to its majority participation in banking. Last night, the Ministry of Economic Affairs indicated that, if an agreement is reached in principle, it will take into account “From the perspective of generating value and optimizing its ability to recover aid”. In other words, that the operation will be monitored by the Government thinking of a future sale of its part in Bankia.

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