Economía and BBVA confirm their differences over takeover bid

disagreements between Economía and BBVA regarding the takeover bid for Sabadellwhich is awaiting authorization from the European Central Bank/Bank of Spain, CNMC and CNMV, remains unchanged since the announcement of the operation. Carlos Torres, president of BBVA, argues that this proposal strengthens the position

disagreements between Economía and BBVA regarding the takeover bid for Sabadellwhich is awaiting authorization from the European Central Bank/Bank of Spain, CNMC and CNMV, remains unchanged since the announcement of the operation. Carlos Torres, president of BBVA, argues that the proposal will strengthen Spain’s financial system. help the economy, and this is good for Sabadell shareholders, while Minister Carlos Bodi highlights concerns of large banks over systemic riskrealizing that they can hinder competition by reducing the number of participants and negatively impacting customer service.

Bodie and Torres met at the opening of a course at the International University of Menendez Pelayo, organized by APIE, and although The bank president used his intervention to discuss the nature of the transaction. The Minister did not mention this issue until the time of the question.

Torres emphasized the importance that small and medium-sized companies and the self-employed have for the Spanish economy.noting that Sabadell is a very skilled player in this field. pledging to “support the risk management model that Sabadell has” in the sectorr if the purchase operation was successful, and also “a maintain circulation lines (which Sabadell has with these companies) for at least twelve months for all of them.” He pledged to “not only not leave any municipality where the bank is present,” but even talked about “not leaving the districts.”which the Minister used to recall that one of his main cautions regarding the operation was the risk financial isolation it “occurs not only in rural areas, but also in some urban areas, especially in lower income areas.”

Curious, possible job loss which was one of the issues raised in all concentration operations, doesn’t seem significant in this case because, according to Torres, “since both banks had already made significant staff reductions several years ago,” this would not be a significant source of cost savings. “These are fixed costs (investments in digitalization, technology and cybersecurity)” on which corresponding savings can be realized “due to the larger size,” he said.

The Minister insisted on his idea that a significant part of the fact that Spanish banks did not repay their clients’ obligations, like banks in other countries, after interest rates increased. The ECB has its origins in high concentration of the Spanish financial sectorthe situation could get worse if BBVA merges with Sabadell.

Torres said the main reason was high existing liquiditywhich was also noted as an important element by the Vice President of the ECB, Luis de Guindos.

Taking advantage of his intervention, Carlos Cuerpo said that in early July his ministry will revise its economic growth forecast for this year upward.. “Our forecast will be closer to the 2.5%” that various analyst firms are presenting than to the “2%” that is the executive’s original figure.