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
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