Banca.CaixaBank and Bankia prepare an imminent merger accelerated by the coronavirus crisis
Companies.Bankia and CaixaBank, a strategic merger to survive
The merger between Bankia and CaixaBank responds to a strategic logic of reducing costs in order to face the drop in income in the sector.
The market in general has highlighted the positive side of this operation, but there are some firms that also call for caution.
This is the case of
, which warns this Monday that the agreement "would not create a stronger institution."
The rating agency acknowledges the "significant" potential cost savings, but notes that "given the difference of two levels in Moody's benchmark credit assessment of both institutions and in the absence of a capital increase (risk-weighted assets will increase by more than 50%), the agreement would not create a stronger institution. "
Both entities announced last Thursday, September 3, that they are in negotiations to close the merger of both companies.
The result, if this operation takes place,
would be the largest bank in Spain,
with assets worth more than 650,000 million euros.
The negative side would come from the side of the closing of branches and the layoffs derived from the synergy of the two groups and that would put thousands of jobs at risk.
The Government, through the Ministry of Economic Affairs and the president himself, Pedro Sánchez, has approved the operation.
The Frob (Fund for Orderly Bank Restructuring), owned by the State, owns almost 62% of Bankia's capital and its approval is essential.
"There are good wickers to be a positive operation for the Spanish economy," Sánchez responded in an interview on La 1 de TVE this Monday.
Moody's, for its part, explains that the reduction of the cost structure "would provide some counterweight to the expected profitability pressures. However, the conditions for regulatory approvals, including possible disposals of assets that are unknown in this stage".
Something that could be a difficulty in the entire integration process.
The firm adds that the efficiency advantages "may take time to materialize and require significant restructuring costs, which will affect profitability from the beginning" and also warns of the impact that the crisis in the Spanish economy caused by the coronavirus may cause.
"Given the depressing macroeconomic prospects for the Spanish economy, execution risks are high", only mitigated "by the complementarity of the business profiles of both banks and their solid track record in previous transactions."
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