The Government conveys to the ECB the possible “harmful effect” of the BBVA takeover bid for Sabadell

The Government has sent its reserves to Frankfurt for the hostile takeover launched by BBVA for Banco Sabadell, an operation that in its opinion will create restrictions on competition in the Spanish banking sector.

Oliver Thansan
Oliver Thansan
14 May 2024 Tuesday 10:53
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The Government conveys to the ECB the possible “harmful effect” of the BBVA takeover bid for Sabadell

The Government has sent its reserves to Frankfurt for the hostile takeover launched by BBVA for Banco Sabadell, an operation that in its opinion will create restrictions on competition in the Spanish banking sector. The Minister of Economy, Carlos Body, raised the issue yesterday during a conversation held in Brussels with the president of the Supervisory Board of the European Central Bank (ECB), Claudia Buch, who in his opinion was “curious” to know the executive's arguments. against the operation.

“We have commented on the state of the situation and the good health of our financial system, and I have also commented on those concerns regarding the impact in terms of concentration and, therefore, the possible harmful effect in terms of competition” of the operation, Corpo explained. to the press in the community capital after meeting with Buch.

Although the central issuer will only be responsible, eventually, for ruling on solvency issues and not on the impact it would have on banking competition in Spain, the executive wanted to make clear the reasons why he opposes the banking giant's takeover of the Bank. Sabadell. “She was curious to know our arguments and we had a very relaxed talk about the situation of competition and the concentration of financial markets in Europe, which is an issue of relevance to the entire EU and not just Spain,” he said. the minister

The meeting between Corpo and Buch was arranged before BBVA's intention to acquire the Catalan entity was known and did not deal exclusively with the operation. Sources from the central broadcaster clarified that the president of the ECB Supervisory Board participated for the first time yesterday in the Eurogroup meeting and the meeting was a first contact with the Spanish minister. In the conversation, Buch "limited himself to explaining the role that the ECB has as a supervisor and the requirements that it analyzes from a prudential point of view," say the aforementioned sources, who emphasize that he did not point to "any specific pronouncement." Indeed, the role of the ECB in this operation will be minimal. In accordance with European regulations, the entity potentially resulting from the acquisition would be subject to higher solvency requirements than those currently applied, separately, to BBVA and Sabadell, but it is assumed that the ECB report will be positive.

The evaluation of the consequences of the concentration on the Spanish financial sector will be carried out at the national level and will fall to the National Markets and Competition Commission (CNMC), which could set conditions for the operation in order to give it the green light. A positive opinion from the National Securities Market Commission will also be necessary. As the Corps has emphasized these days, it will be the Government that has “the last word to authorize” the operation or not. In Frankfort, internally, it is considered practically certain that, although with conditions from the CNMC and perhaps only after an improvement in the offer from BBVA, it will end up going ahead.

Body did not assess the political implications of the banking operation but predicted the beginning of “a new stage” of “greater stability” and economic prosperity for Catalonia as a consequence of the result of Sunday's elections. “From an economic point of view, this new stage can be very positive because a period of greater stability will generate greater investments and greater growth in Catalonia and therefore also in Spain,” he highlighted in reference to the PSC victory.

The good growth figures for the economy in 2023 and the forecasts for this year, which several international organizations have revised upwards to align them with those of the Government, allow Spain to arrive in “a position of strength” in the face of the examination of the public accounts that the European Commission will carry out in the coming months and that in principle will lead to the opening of files for excessive deficit to all countries in which this indicator exceeds the threshold of 3% of GDP. Body hopes to prevent Spain from being among the countries identified by Brussels: according to Economy forecasts, the gap between expenses and income will be reduced to that figure this year.

“This Government is doing its homework and the economy is evolving favorably,” stressed Body, which admitted that the good growth figures for 2023 would not have been possible “without the contributions” of the Recovery and Resilience Plan and the Next Generation EU funds. The payment of the fourth tranche of aid allocated to Spain, 10,000 million euros, is up in the air waiting for the unemployment subsidy reform to be approved but the Government is confident that it will be completed in time to receive a “full” payment. ” and it will not be necessary to assume a partial disbursement.