Josep Oliu: “The merger of BBVA and Banco Sabadell will have a negative impact on SMEs”

• The president of Banco Sabadell warned against concentrations that lead to market dominance and oligopolies.
• Oliu highlighted the volatility of the offer presented by BBVA, given that it is denominated in shares and that it is a bank that has a majority stake in developing countries.
• Today in Oviedo, Oliu presented the Banco Sabadell Foundation Prize for Economic Research.

October 8, 2024

He President of Banco Sabadell, Josep Oliu, assured that “It is clear that the merger of BBVA and Sabadell will have a negative impact on companies, mainly SMEs.”, as this will make it difficult for them to access credit and its services due to the high level of concentration.

During his speech at the awards ceremony in Oviedo XXIII Banco Sabadell Foundation Prize for Economic ResearchOliu insisted that the negative consequences of the possible operation would particularly affect SMEs located in the north of Spain and the Mediterranean region, especially in Catalonia and the Valencian Community.

Oliu stated that concentration limits “This an issue that regulators need to consider competition, assessing whether the operation is likely to significantly affect the degree of oligopoly in the market for companies or citizens, whether in Spain or in certain regions.“

In this sense, he reiterated that the issue of size is important in all sectors because “Cost savings can be achieved through concentration, but also dominant market position“

The organization’s president explained that consolidation could lead to stronger banks, better diversification of risks and greater economies of scale if done at the European level, but he warned that all these arguments lose force if they rely on problems with concentration market in the country.

In any case, the president of Banco Sabadell admitted that barriers to European consolidation still remain, since there is no European deposit guarantee system. “We are sure, and it must be so, that Europe will be able to reach an agreement on the implementation of the FGD European Union and relevant and related settlement mechanisms“, he emphasized.

Regarding the hostile proposal from BBVA, Oliu demanded that full information is available to shareholders from Banco Sabadell, who must make decisions, and also emphasized the instability of the supply. This uncertainty about what is being offered, he explained, stems from the fact that it is presented as an exchange of shares and that, moreover, it is a bank that has “most shares are in developing countries and are therefore separated, for better or worse, from the Spanish or European markets”.

The organization’s president also noted that in this type of operation, as well as in the one proposed by BBVA, “execution risks can make erode the apparent premium within a few monthsespecially when this operation is contested by the majority of social actors who will experience its consequences.“

BBVA initially offered to exchange 1 newly issued BBVA share for every 4.83 shares of Banco Sabadell, which at that time represented a premium of 30% to the average price of Banco Sabadell shares over the previous three months as of April 29. The stock was subsequently adjusted to 5.0195 shares after dividends plus 5.7 cents in cash per share. Since Banco Sabadell has outperformed the stock market and BBVA has fallen, the premium is coming down. Tuesday’s close was 2.85%.

Dr. Eduardo Davila Economic Research Award

In addition, Josep Oliu wanted to highlight the outstanding contribution of Dr. Eduardo Davilaawarded in the twenty-third edition Banco Sabadell Foundation Prize for Economic Researchwith a particular focus on the area of ​​financial regulation, and encouraged it to continue to deepen its analysis to continue to create a strong and sustainable financial environment.

The award ceremony took place this afternoon at the headquarters Banco Sabadell in Oviedo The event was attended, among other participants, by Sonia Mulero, director of the Banco Sabadell Foundation and the Minister of Science, Business, Training and Employment of Asturias, Borja Sánchez.

Eduardo Davila received a degree in economics from Pompeu Fabra University and a PhD in economics from Harvard. Currently, he is not only a professor of economics and finance at Yale University, but also a research fellow at the National Bureau of Economic Research (NBER). He was previously a professor of finance at New York University’s Stern School of Business.

His Research focuses on finance and macroeconomics.with a focus on the study of regulatory and welfare issues. Among other topics, he has studied monetary externalities, corporate taxes and financial transactions, and the optimal design of financial regulation and monetary policy.

The Banco Sabadell Foundation Prize for Economic Research, established in 2001, is career incentive for young researchers and a distinction for his career.

Together with the Biomedical Research and Science and Technology Prizes, which were awarded last July for work on fertility and climate change, and the Marine Sustainability Prize, which will be awarded on November 5 in Alicante, form the Banco Sabadell Foundation’s commitment , to recognize the best research talent and give significance to the impact of their areas of research on human progress and well-being.