October 22, 2020

who is who in the merger of Bankia and CaixaBank

With the endorsement of the boards of directors and, in the absence of the shareholders’ meetings definitively approving the operation, the merger of Bankia and CaixaBank begins, which will end in the creation of the largest financial group in the country and one of the most important Europe by volume of assets under management. Here is a guide with all the people and companies that are involved in the agreement:

CaixaBankBefore this agreement, it was the third largest Spanish financial institution by volume of assets. She is heir to the Caixa, the Catalan savings bank around which other entities joined after the financial crisis such as Banco de Valencia, Caja Guadalajara, Cajasol, Caja Burgos and others. In the first half of this year, it earned 205 million euros, 67% less due to provisions for the COVID-19 crisis.

Bankia: Like CaixaBank, Bankia is the heir to several savings banks that came together during the financial crisis, in this case around Caja Madrid. And also like CaixaBank, it debuted on the stock market in July 2011. However, the Bankia case finally required a millionaire bank rescue, the largest of the entire financial crisis in Spain, with more than 22,000 million euros of public injection. Since then, its main shareholder is the State, with 62% of the titles.

CriteriaCaixa: The holding company that includes all the business holdings of the La Caixa Foundation becomes the first shareholder of the new group with this operation, after having agreed to exchange shares with Bankia. In addition to having around 40% of CaixaBank, Criteria participates in Naturgy (24%), Suez (5.9%), Cellnex (5%), Telefónica (1.3%) or Saba (99.5%) .

Financial and Savings Bank (BFA): It is the first shareholder of Bankia, owner of 62%. It was born in 2011 as the union of Caja Madrid, Bancaja, Caja de Canarias, Caja de Ávila, Caixa Laietana, Caja Segovia and Caja Rioja. In turn, it is 100% owned by the Fund for Orderly Bank Restructuring (FROB), after the State had to inject more than 22,000 million into the financial institution after a failed IPO.

FROB: It is the fund through which the State directed the rescue of savings banks since their creation in 2009 and their subsequent reinforcement in 2012. It was responsible for cleaning up and injecting capital into savings banks with the greatest problems during the financial crisis and , subsequently, to award them to other entities in a better situation. Its Governing Council, now chaired by Jaime Ponce, is made up of four members of the Bank of Spain -among them, the deputy governor-, three from the Ministry of Economy, two from the Treasury and the vice president of the National Securities Market Commission.

Isidre Fainé: He was the president of La Caixa and one of the country’s great bankers at the beginning of the century, along with Emilio Botín and Francisco González. He is currently the chairman of Criteria, the main shareholder of CaixaBank, and of CECA, the banking association that encompasses the former savings banks, mainly Bankia and CaixaBank. It is pointed out as the great promoter of the operation. A merger that he had longed for in the past, in the days of La Caixa and Caja Madrid.

Jaime Ponce: He is the president of the other large shareholder of the new entity, the FROB. He has served as the first executive of the rescue fund since 2015, when he replaced Fernando Restoy, at the proposal of the then Minister of Economy, Luis de Guindos. The FROB regulations establish that the position of president only lasts five non-extendable years, a date that expired in July of this year. The Council of Ministers, in the midst of the COVID pandemic, decided to keep the position until deciding a replacement. She belongs to the superior body of civil administrators of the State and has held different responsibilities in the General Secretariat of the Treasury.

Jose Ignacio Goirigolzarri: He has been the president of Bankia since he replaced Rodrigo Rato in the position in 2012, today awaiting conviction for the IPO that led to the rescue of the entity. He was Francisco González’s right-hand man at BBVA, where he held the position of vice president of the group until 2009. He was vice president of Telefónica and Repsol. He has been a firm defender of the privatization of Bankia to prevent it from being used “as an instrument of economic policy”, although it has recognized that the market situation meant that “it was not the moment”. Podemos requested in its program for the past elections to replace the president of Bankia with someone “who is capable of understanding the role that public banks should play in improving the country.” It will be predictably the president of the new entity.

Jordi Gual: Has held the presidency of CaixaBank since Fainé left office in 2016. Previously he was the chief economist of the entity. He assumed the presidency without executive functions. Only Gual and Pedro Guerrero at Bankinter are presidents of Ibex banks without executive functions, something that has been pointed out by the ECB and different organizations such as the corporate governance model that financial institutions should have.

Gonzalo Cortazar: He has been the CEO of CaixaBank since 2014. He was Fainé’s right-hand man and has remained in the position since then as chief executive of the financial group, while the former president has focused on the La Caixa Foundation holding company. Cortázar precisely joined CaixaBank from Criteria, after having developed his career at Morgan Stanley. According to various information, he would continue as the CEO of the new entity. He will presumably assume the position of CEO and will be the executive head of the business, as reported by El Confidencial.

Jose Sevilla: He has been Goirigolzarri’s right hand in Bankia since both landed on the council after the departure of Rodrigo Rato. He has since been the CEO of the rescued group. Like the bank’s president, he came from BBVA, where he held different responsibilities and participated in the management committee. He had previously developed his career at Merril Lynch and at FG Inversiones Burstiles, the securities company founded by Francisco González.

Nadia calviño: The Minister of Economy has been repeatedly favorable to the divestment of the State in Bankia, which has led to a clear distance from the partner that shares in the Government, United We Can. The President of the Government pointed out that only Calviño’s cabinet knew about the operation before it was announced to the market on September 3, a circumstance that was criticized from Podemos, as a way of maintaining the confidentiality of the process. Some sources assure that her role in the negotiation with Isidre Fainé has been fundamental for the operation to be successful.

Luis de Guindos: In the background but with a clear influence is the former Minister of Economy in the Government of Mariano Rajoy. From the vice presidency of the European Central Bank, a position he has held since 2018, he has repeatedly advocated for urging financial institutions to merge in search of greater profitability from a business that has been in crisis in recent times. This same Thursday he defended the management that was made to rescue Bankia while he was minister. “The alternative of not having done anything would have been more costly for the economy and for the Spanish citizen,” he assured at a meeting of the Association for the Progress of Management (APD)


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