Possible BBVA-Sabadell bank will be the first enterprise in Spain in terms of assets

A new merger is on the horizon. This time history repeats itself and it was BBVA that became interested in Banco Sabadell again, as it already happened in 2020. This time the news appeared when the presentation of the results of Spanish banks ended. British media SkyNews published this news, which a few minutes later BBVA confirmed to the National Securities Market Commission in a statement in which it assured that, together with its consultants, it was interested in a merger with Sabadell. If it turns out This new bank will be the first bank in Spain in terms of assets..

Thus, the resulting entity The value of BBVA-Sabadell’s assets in Spain will be 637,461 million euros. which will displace CaixaBank from the position of first place, which it achieved thanks to the merger with Bankia in 2021, and Banco Santander, which currently occupies the second position. At the moment, with merger negotiations still ongoing, BBVA ranks third with assets of 452.227 million euros. For its part, Banco Sabadell has assets worth $185.234 million, making it the fourth bank.

CaixaBank, the leader in this ranking, has group assets of approximately 613,457 million euros., as they do not break down these results by geography, although the majority of these assets will be in their Spanish business. The figure was achieved thanks to the merger with Bankia. Banco Santander, for its part, has assets of 468.807 million euros, making it the second bank by assets in Spain, which would drop to third place if the merger were to take place. If you look at the European level, BBVA-Sabadell would take third place. In this case, Banco Santander ranks first in terms of assets, and UBS is second.

In addition to assets, close sources claim that both banks have great “additionality”. Banco Sabadell is “very strong” in SMEs, while BBVA has “great potential” in retail as well as companies. “The strategic fit could be enormous and, above all, of great value to the BBVA shareholder,” the same sources noted.

BBVA confirmed to CNMV that it has appointed advisors to negotiate the merger. Industry sources note that these advisors JP Morganwhat the company was already counting on when the merger failed in 2020, and UBS and for legal advice in the office Garrigueswhich is also repeated.

If confirmed, the acquisition would create a Spanish banking giant with a market capitalization of over €73.2 billion. Such a market value would make it the third company in the Ibex 35, behind Inditex and Iberdrola, and above Banco Santander, which closed on Tuesday with a market capitalization of 72.37 billion euros.

However, in terms of other indicators and variables, CaixaBank will continue to barely maintain its first position. For example, if instead of looking at total assets, you look at CaixaBank closed loans to customers in March with 344.697 million eurosand on the balance sheets of BBVA and Sabadell the total amount of loans to customers amounts to 327.353 million euros.

In terms of deposits, CaixaBank will continue to be the “custodian of savings” of Spaniards with 402.544 million euros, compared to 395.902 million for BBVA-Sabadell. Santander will still be lower on these two measures: 245,231 million in customer loans and 319,431 million in deposits.

At the end of the first quarter of the year, CaixaBank had 4,161 branches, and 3,084 institutions were registered in the future merged bank: 1881 from BBVA and 1203 from Banco Sabadell. In terms of employee numbers, CaixaBank ended last month with 45,005 employees, while BBVA and Sabadell’s employees in Spain reached 41,634.

The merger will also raise new questions about the future ownership of TSB, which Sabadell has considered selling in the past. However, the scenario and context of this merger are not the same as the first attempt four years ago. Banco Sabadell has a much larger market capitalization. In fact, Sabadell’s capitalization is 15% of BBVA’s, which represents a “very large” operation. and its profits set records. In fact, the Catalan entity has been one of the protagonists in recent months as it has discussed a possible merger between Sabadell and Unicaja, in which the first would be those to absorb the Andalusian bank.

Renta 4 analyst Nuria Alvarez said the merger with Sabadell would be a “demanding” transaction for BBVA in terms of financing, and it might have to undertake a capital raise to do so. He noted that the news that BBVA is once again exploring the possibility of merging with Sabadell This was a surprise”, after the two companies failed to reach an agreement on a 2020 share swap equation.

In 2020, when the operation was first proposed, Sabadell’s situation was not the same as it is now, with an aging team, less digitalization and the UK subsidiary TSB posting a net loss of €220 million. However, starting in 2021 and thanks to the arrival of the current CEO Cesar Gonzalez-Bueno, the bank managed to turn the tide, “significantly” increasing profitability. risk management and cost structure.