Asturias will be the second region, only behind Catalonia, in which banking concentration will increase the most if the merger by absorption of Banco Sabadell by BBVA materializes, according to a report prepared by the company Analistas Financieros Internacionales (AFI). at the end of 2020, when the previous attempt to annex the Catalan entity by the group of Basque origin occurred.

The estimate was formulated according to the Herfindahl-Hirschman index (HHI), which attributes a value of 0 to a market of infinite competitors and 10,000 to an extreme situation of monopoly. According to the study, the merger of BBVA and Sabadell (both with relevant implementation in the Principality), together with the integration of Caixabank and Bankia – which was carried out, but which had little impact in Asturias due to the low implementation of the second of both entities – would entail an increase of 363 points in the concentration index of the sector in the region.

This degree of convergence would only be less than the advance of 714 points in the Catalan community, the main fiefdom of Sabadell and Caixabank, and where BBVA absorbed six former Catalan savings banks since 2012 (including Caixa Catalunya, the second most relevant in the region, and Caixa Sabadell) and Bankia integrated the former Caixa Girona. The third region with the greatest increase in sectoral consolidation would be, with an increase of 267 points, the Valencian Community, where Sabadell took control of the former Alicante savings bank CAM, Caixabank took over Banco de Valencia and Bankia had incorporated the Valencian savings bank. Bancaja.

The relevant effect that the eventual union of BBVA and Sabadell would have on the composition and diversity of the Asturian banking market is explained by the great weight of both entities in the territory, where BBVA is the successor of the Asturian Bank of Industry and Commerce and Sabadell swallowed up successively to the Asturias and Herrero banks.

After the AFI study, the Asturian Liberbank was absorbed by the Andalusian Unicaja, but this operation barely changed the degree of banking concentration in the Principality, given that the Malaga entity only had a couple of offices in the Principality.

The great banking concentration that occurred in Spain since the financial crisis of the 1970s, and especially since 2008, has led the sector to a dramatic reduction in operators. Between the 1970s and early 1980s, 56 of the 110 existing banks in the country, 23 rural banks and some savings banks, were affected by the financial crisis. Then, from the late 80s and throughout the 90s, there was a dance of large banking mergers, some forced by situations of weakness caused by the annexation of smaller entities with problems in the effort to lead the “ranking” of the sector. any price and others for size searches to gain efficiency and protect themselves in a single European market that was feared could entail a cross-border challenge that later did not have as relevant an effect for the survival of national markets as that which was suspected.

At that time, the integration of the Bilbao and Vizcaya banks took place (with the subsequent assumption of Argentaria), that of Central and Hispano Americano (later annexed by Santander) and the takeover of Banesto by Santander. All of this blew up the traditional competition of the “big seven”, since then reduced to three: Santander (with its subsidiary Banesto, which continued to move with relative autonomy), BBVA and, further away, Popular.

In those years there was also a silent “revolution” in savings banks. The 76 existing in 1991 were reduced to 45 in 2000 as a result of thirteen merger processes carried out in that decade by 31 entities.

The simplification of the banking map was even more extreme since 1995 with the great consolidation process led by Banco Sabadell in the medium-sized banking segment: it acquired Citibank offices and control of NatWest Bank España, Banco de Asturias, Banco Herrero , Atlántico and Urquijo.

The 2008 financial crisis, which hit the sector dramatically in Spain starting in 2010, was an earthquake for savings banks. Of the 45 existing then, two survive as such today (Caixa Pollença and Caixa Ontiyent), the only ones that, due to their local implementation, were not forced to transfer their businesses to newly created banks. The former savings banks, converted into banking foundations, today control four banking entities: Caixabank, Unicaja, Kutxabank and Ibercaja. The rest disappeared or survive as mere foundations with non-determining stakes in the banks that swallowed up their financial businesses.

The 2010 crisis also meant a forceful simplification of the map of credit cooperatives, in the case – among others – of rural banks. Of the 81 that existed in 2007, 62 survive today.

Banking was not left out of the earthquake. In addition to the large capital increases that they undertook – the savings banks lacked that option, which forced the suffocation of many of them –, Santander came to the aid of its investees Banif and Banesto by absorbing them; Popular integrated Pastor and Citibank Spain; Sabadell stayed with Guipuzcoano, and in 2017 Popular (the fourth group in the country) collapsed, disappearing diluted into Santander. The Galician and Valencia banks (subsidiaries of savings banks) passed to Sabadell and Caixabank.

In this context, Abanca emerged as a new consolidating actor in the sector. The purchase of the Galician bank Etcheverría in 2012 by the Banesco group, owned by the Asturian-Venezuelan banker Juan Carlos Escotet, and the takeover the following year by this operator of Nova Galicia Banco (successor of Caixa Galicia and Caixa Nova), opened a very belligerent actor that has since annexed Etcheverría, Banco Caixa Geral (Spanish subsidiary of the Portuguese Caixa Geral de Depósitos), the Basque Bankoa and Targobank. Along the way he tried twice to stay with Liberbank, finally integrated into Unicaja in 2021, and tried to take over the Spanish subsidiary of Deutsche Bank.

Of the ten significant banks that today concentrate the banking business and the defunct savings banks, only Bankinter has remained outside the mergers.

This earthquake has meant that the Spanish banking sector has undergone one of the most drastic reductions in the number of competitors in the eurozone.

The degree of concentration achieved is not unrelated to the fact that Spain is one of the European countries that pays the least on liabilities since the eurozone began on July 21, 2022 – for the first time since 2011 – to raise official interest rates. .

The market power of the surviving banking groups has been reinforced as the number of operators has been simplified rapidly. But the fact that it has been the fourth most belligerent country since the creation of the euro in 1999 in banking concentration does not mean that it exceeds levels that regulators could judge dangerous for the free market (Spain occupies 12th place out of the 26 countries in the EU) and even more so when virtual banking has opened a range of new options. Now, BBVA's new move on Sabadell, which would mean the union of the second and fourth banks, and which would give rise to the second banking group with Spanish capital (after Santander) and the first in terms of market share in Spain, will force, if Finally, the scrutiny by the Competition bodies, which must evaluate to what extent it is possible to speak of an oligopoly or, as the banking association AEB says, there is still “a lot of competition.”

UGT and CC OO, Sumar and some leader of the PP (Carlos Mazón, president of the Valencian Community) have warned, as have some business and chamber organizations, of the risk that could entail for the market that only three entities (Santander, Caixabank and BBVA) came to control more than 70% of the country's deposits and loans.

The other fear has to do with the new labor adjustments that the operation would entail and the risk of more office and ATM closures, and the threat of the so-called banking exclusion continuing, which leaves numerous areas without in-person service provision. rural and sometimes urban.

Of the 45,624 branches that existed in Spain in 2008, today there are 17,679 left. 61.25% have disappeared. Without being the most affected community, Asturias has gone from 655 to 458 in the last five years, a cut of a third. And 12 of the 78 councils lack a bank office, although they are far from being among the most affected regions. With 2.12% of the Spanish population, Asturias concentrates 2.59% of the country's branches.

You May Also Like

More From Author

+ There are no comments

Add yours