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Bankia & Caixabank are close to finalizing a merger

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Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
A new banking power to emerge in Spain

If last week two European utilities companies were eyeing a possible takeover, now, also in Europe, two of the largest banks in Spain are discussing a #merger.

The state-owned Bankia is the candidate for a merger with Caixabank. By this future merger, the banks are looking to create the most extensive domestic lender in the country, with more than €600 billion worth of assets. 

Even though the merger is applauded both by the banking sector and the country's Prime Minister Pedro Sanchez, the banks' unification could reignite tensions in the Spanish government. The left-wing Unidas Podemos stated the idea that Bankia should remain a state institution and serve the interests of taxpayers being in opposition with the Socialist-led government. Also, the deal could lead to hefty job cuts. 

However, it is not for the first time when Bankia is in the spotlight. At the peak of the Spanish #financial #crisis in 2012, Bankia was bailed out in a €22.4 billion state rescue. To date, it managed to repay €3.3 billion. 

The details of the deal are being finalized, and upon the agreement, the state's 61.8% stake in Bankia could drop to roughly 14%, while Caixabank – the main entity, will have around 30%. 

At the moment, Bankia stock price is trading 0.18% lower, while Caixabank is at – 0.88%. 

Sources: oann.com, reuters.com, finance.yahoo.com


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.