Bank of Spain separates ‘Villarjo case’ from approval of BBVA’s takeover bid for Sabadell | Companies

The deputy governor of the Bank of Spain and acting governor, Margarita Delgado, this Friday separated the resolution of BBVA’s takeover bid for Banco Sabadell from the decision of Judge Manuel García Castellón to formally prosecute BBVA as a legal entity in the Villarejo case. Delgado explained that the banking supervisor’s decision on this latter issue will be made after the final decision, while the analysis of the takeover bid will only last for these months and will only concern prudential significance criteria.

In his speech at the XLI seminar of the Association of Economic Information Journalists (APIE), Delgado explained that the Bank of Spain and the European Central Bank (ECB) will analyze the takeover bid like any other transaction. In particular, he clarified that they have a period of 60 days from the moment BBVA sends an authorization request on June 4, which can be interrupted after 15 days. He also clarified that the procedure analyzes the viability of the operation. “This is a no-objection procedure. We do not analyze the benefit, but rather whether it is viable from the point of view of the liquidity, solvency and business plan of the resulting enterprise,” he explained.

Regarding the Villarejo case, the deputy governor explained that the supervisory authority will not analyze the matter until a final decision is made. Then, he said, they will examine whether the situation complies with “internal control systems” and take “appropriate action,” as he said has happened with other cases involving foreign entities in the past. “The judge’s order on Thursday is further information, but it is not basic in terms of no objection to the takeover bid,” he said.

Regarding the level of concentration of the sector in Spain, Delgado recalled that this issue is in the hands of the National Commission for Markets and Competition (CNMC). In any case, he believes that, despite the merger process occurring since the onset of the Great Recession, “there are still many organizations, large, significant and up to 100 more or less significant organizations that intelligently offer financial services to companies and to private individuals.” persons.”

He noted that an example of this is the situation in the mortgage market, where, according to him, there is “great competition.” “Competence is measured in many dimensions. Every case is a world. This issue will need to be analyzed at an appropriate time. The Bank of Spain ensures financial stability and relies on every part of the banking sector,” he said.

Delgado also mentioned the institution’s decision to raise countercyclical capital buffers for banks. He described the situation as a “change of chips” and that the purpose of this decision is to be able to accumulate capital during times of prosperity when the risks are not excessive. He explained that this means reserving 100 basis points of capital buffers, which in Spain average 300 basis points, that banks will not be able to use to counter potential future risks.

Regarding succession in the management of the Bank of Spain, Delgado acknowledged that the current situation is not the usual one in which she, as deputy governor, took over the powers of the governor after the expiration of the term of Pablo Hernández de Cos. , until September. He said it would be desirable for the government to appoint new leadership in the coming weeks.

He also cited that his provisional status prevents him from voting at European Central Bank meetings. A situation that has been downplayed – as ECB Vice President Luis de Guindos already did on Monday – given that he claims that decisions are made by consensus. “Yes, I have the right to a voice, and my voice can be heard,” he concluded.

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