The Pimec employers' affiliation warns in opposition to the consequences of the BBVA takeover bid on Sabadell: much less credit score, department closures and layoffs | Economy | EUROtoday

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The Catalan affiliation of small and medium-sized companies, Pimec, warned on Tuesday of the destructive penalties that the hostile takeover bid that BBVA launched two months in the past on Banco Sabadell may have: fewer and dearer loans, lower-paid deposits and elevated commissions, in addition to department closures and layoffs. This is mirrored in a report ready by Pimec, which additionally requires the results of financial institution mergers a decade in the past to be recalled. “We have already seen what happened with takeovers in the past. We have less banking supply and companies lose their ability to finance. What we need is a strong banking system,” mentioned the president of the affiliation, Antoni Cañete.

In getting ready the report, which was directed by the Professor of Economics at Pompeu Fabra University, Oriol Amat, facets such because the affect on banking competitors, the provision of credit score and the discount of workplaces and jobs have been analysed. The report highlights that Banco Sabadell is in a second of “solidity” and “financial and operational strength” and refers back to the good outcomes: web revenue of 1,333 million on the finish of 2023 (48% greater than the earlier 12 months), a 15% enhance within the inventory market worth final 12 months and a rise within the workforce of 404 folks.

One of essentially the most noticeable penalties of the merger could be the discount of branches and layoffs, one thing that Pimec is bound will occur, as has occurred in different mergers. “BBVA has calculated 1.45 billion euros of synergies, which is understood to be a reduction in expenses, which means closing branches and reducing jobs,” Amat mentioned. Taking into consideration absorption processes from a decade in the past, Pimec calculates a possible discount of between 589 and 883 branches in Spain —virtually 1 / 4 of them in Catalonia— and layoffs that may have an effect on between 7,685 and 10,567 folks.

The report additionally considers that the operation would scale back banking competitors, in order that the 2 most important banks, CaixaBank and the brand new entity that may emerge after the takeover bid, would monopolise 74% of the branches in Catalonia. According to Pimec, better banking focus may have “negative” results on corporations, particularly small and medium-sized ones, on customers (decrease deposit remuneration and elevated commissions), in addition to in rural areas, with an already restricted presence of branches and ATMs.

But the employers' affiliation is especially involved about the truth that a better focus of banks will translate into much less availability of credit score. Specifically, they estimate it to be 8% much less; that’s, 54,393 million much less. “For companies, having a diversification of credit is important, they need to have several sources of oxygen. And the loss of credit will prevent many business projects from moving forward and, consequently, the growth of the productive fabric,” harassed Josep Ginesta, secretary common of Pimec. Ginesta admitted that many related corporations have expressed their concern concerning the operation, since lots of them are shoppers of Sabadell, an entity that has historically targeted on the company enterprise.

Petition to regulatory our bodies

The course of overcame a brand new impediment final week, after the BBVA shareholders' assembly gave its full assist (96% of the capital) to the 19% capital enhance to have the ability to finance the hostile takeover bid for the Catalan financial institution. However, there’s nonetheless an extended solution to go earlier than BBVA's intentions come to fruition. The essential authorisations from establishments such because the European Central Bank (ECB), the National Commission of Markets and Competition (CNMC) and the National Securities Market Commission (CNMV) are nonetheless missing, in addition to the vast majority of Sabadell shareholders giving their assist. In this regard, Pimec takes benefit of its report back to ask these organisations to bear in mind its knowledge and warnings when making their pronouncements.

For the second, the operation has been rejected outright by the Government, and the Minister of Economy, Carlos Cuerpo, has already warned the Basque financial institution from the outset that “the Government has the final say.”

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