Walter Finch
BBVA’s long running hostile takeover bid of Banco Sabadell ‘poses a threat to the economic wellbeing of Spain’, according to the Catalan bank’s boardroom.
Banco Sabadell’s leadership went on to call on the government to take a clear stance on whether it will block the proposed merger in an escalation of Spain’s most significant banking battle in years.
Speaking at a meeting of shareholders, Sabadell’s president and CEO insisted the operation ‘makes no sense’ and even threatens the competition in the Spanish banking sector.
“This isn’t just about Sabadell – it puts Spain’s economic wellbeing at risk,” CEO Cesar Gonzalez-Bueno told shareholders as he pointed to the dangers of further concentration in Spain’s already consolidated banking system.
The Sabadell board has the backing from a coalition of business associations, trade unions, and chambers of commerce who all oppose the merger.
However, Spain’s National Commission for Markets and Competition (CNMC) rejected the requests of over 70 organisations attempting to take part in regulatory proceedings.
“There is clear social opposition to this takeover that has also become political,” Gonzalez-Bueno emphasised.
“Not because they dislike BBVA, which is a great bank, but simply because Sabadell is necessary for Spain.”
Sabadell executives have focused on the risk for small and medium-sized businesses, which ‘need an average of four or five banks’ to meet their financial needs.
Sabadell President Josep Oliu urged the bank’s shareholders to consider the risks before choosing the share swap against the board’s wishes.
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He pointed out that BBVA might choose not to merge the two entities after acquisition, BBVA’s exposure to volatile markets like Mexico and Turkey, and the capital costs of the combined bank.
The final decision now rests with the CNMC, which will complete its analysis before handing supervisory authority to the Council of Ministers.
The government, led by Prime Minister Pedro Sanchez, has previously expressed opposition to the merger but has not clarified whether it will exercise its veto power.
