December 3, 2021

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Back with the merger of BBVA and Banco Sabadell |  comp

Back with the merger of BBVA and Banco Sabadell | comp

Last Tuesday, a famous banker speculated on a small panel with the possibility that BBVA and Banco Sabadell would re-attempt their merger, whose negotiations collapsed in December last year, just over a month after admitting they were embroidering their union.

This banker’s speculations come to mind as a result of the operation announced by BBVA the day before. It was to launch a takeover offer of 50.15% of the capital of its Turkish subsidiary Garanti, which it does not control. The announcement, by the way, surprised the market, which was not expecting this purchase now, causing the share of the entity headed by Carlos Torres to drop by 5.5%.

The reaction of analysts and the press in general was almost unanimous. This process involves increasing the risks and volatility of BBVA and is supposed to prevent a possible merger in Spain and, more specifically, between this entity and Banco Sabadell.

But this director did not share the theories of these groups. He emphasized that within two or three years, at the latest, the two banks would renegotiate their merger. Their argument was that both Carlos Torres, president of the BBVA, and Josep Oleo, his counterpart from Sabadell, wanted the process.

The union of these two banks need not be effected with the income contributed by the sale of his subsidiary in the United States to BBVA. It could be implemented by going to a market that is currently willing to pay for a banking merger if the process makes sense for the industry and investors believe in, managers of the Basque-origin entity have made clear in recent months.

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Dinaria wants to open the debate about the need to keep the money in cash. He says it’s safer in every way

Well, while the BBVA-Sabadell merger cycle has been closed after the announcement of the takeover bid for Garanti’s total capital, Torres goes and reopens the door to the process, just on the bank’s investor day held last Thursday.

“We’ll see what the future holds,” the BBVA president said after a question about this potential operation. And again with this merger.

According to the well-known banker’s theory—which he commented on two days before Torres decided not to shut the door to negotiating with Sabadell again—the fact that both banks cut costs while closing offices and cutting staff, pampers shareholders in the BBVA case with multi-million dollar share buybacks, And that Oliu ultimately chose to keep TSB in order not to sell this subsidiary, “may be signs that they are waiting to fix their homes to renegotiate the operation of the company.”

On the occasion, Sabadell decided not to respond to Torres’ comments on Thursday.

Since Cesar Gonzalez Bueno has been named CEO of Banco Sabadell, and Olio’s powers have been curtailed (but they say he continues to lead a lot), there is no occasion for his CEO to repeat that his mandate by the Board of Directors is: to maintain the entity’s independence. “No merger is under negotiation.”

Having said that, it looks like we’ll have to wait for one or two more exercises to see what the end of this discussion will be. Will BBVA be more Turkish than Spanish, and will Sabadell be able to maintain its independence in the coming years?

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The vaunted union? The answer is in the future, although it must be said that Turkey will contribute to the interest of the Basque community like Spain. Although Mexico will continue to be the miner in the BBVA’s income statement.

Incidentally, one of the objectives of BBVA included in its strategic plan 2021-2024 is to attract 10 million customers from all its subsidiaries. Of this amount, the bank expects to attract 3.6 million users in Spain, a figure not insignificant given the fierce competition that exists in Spain in the financial sector, which now includes new banks. In addition, Spain is one of the most banked countries in the world, with more than 90% of its population having bank accounts, which makes it difficult to gain clients. It will be necessary to see how this is achieved, although this is one of those goals which is like an act of faith. You believe it, you don’t believe it, but it cannot be proven.

He talks about the debates. The debate appears to be taking on increasing weight, albeit at a theoretical level, over whether or not cash will disappear, and whether or not it is more secure than other means of payment. The rise of digital currencies and card payments is starting to worry a part of the population, although it is still small. Although they are willing to raise their voices, meet politicians – who do – with supervisors, with various associations and unions and with anyone who can influence this discussion to a greater or lesser degree.

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The architects of this initiative are members of Denaria, a platform born on the initiative of four cash transport and security companies, which Anged and Cermi have joined in their goals. At this time, many agreements of cooperation or accession are maintained and concluded with more commercial and social associations. Its goal is to keep money in cash to avoid the social exclusion of a part of society, as well as to show that cash is not the origin of tax fraud or the underground economy.

According to this platform, “there is no statistic stating the cash circulating in the economy in a specific period, and therefore it is impossible to know the relationship between tax fraud and the use of cash.” They also emphasized that in Spain “more cards are used in transactions than cash, which again points to this finding of central banks regarding the increasing function of cash as a preservation at the expense of its interest as a means of payment.”

Total, everything for the defense of pasta, but for pasta in cash, even if it is too expensive for the banks.