After the Intesa Sanpaolo Ubi Banca operation, which will give birth to the second European bank by capitalisation, a major banking merger is also in sight in Spain. The indiscretion started in the night between Thursday and Friday and was confirmed the next day by those directly involved: CaixaBank and Bankia have entered into a dialogue that should lead to the merger and the consequent creation of a new Iberian champion.
There is still no agreement, the two institutions specify, but in the meantime the news made their respective titles fly to the Bolsa de Madrid: Bankia gains over 28% at 1,33 euros per share, while CaixaBank is "satisfied" with 13% over 2 euros. The possible risk is also infecting the other financial stocks: Unicaja, LiberBank, Banco Sabadell travel with double-digit earnings, while Banco Santander, which is currently the first Spanish bank and the third European by capitalization, gains 3,7% is Bnp Paribas).
However, the Caixa-Bankia operation would relegate Santander and BBVA, currently the top two Spanish banks by size, to the lowest rungs of the podium: the new group would in fact become the largest in Spain, with 650 billion in assets in the country. However, the negotiation is delicate because Bankia is a bit like the Iberian MPS: in 2012, with the worsening of the financial crisis in Madrid, the State saved it from bankruptcy with an injection of 22,4 billion, becoming a shareholder with 61,8%.
This is why a merger should necessarily go through the green light of the socialist-led government led by Pedro Sanchez: according to reports from El Pais, a 14% share would go to the Spanish state of the entity born from the merger, while the main shareholder would become the Fundacion La Caixa with 30%.
The negotiations come at a time when the Spanish economy is in the throes of a deep recession caused by the impact of the Covid-19 health crisis, with inevitable repercussions on the banking system. Iberian GDP collapsed by 18,5% in the second quarter, during which one million jobs were destroyed. The Government expects a 2020% recession for the whole of 9,2, but the Bank of Spain expects a 15% drop.
