The banking restructuring experienced since the last great recession transformed the financial scenario by going from more than 100 entities and savings banks to thirty. The panorama has been divided into large banks such as , and ; medium-sized like , and smaller ones like Ibercaja, Kutxabank or Abanca. The financial experts consulted by elEconomista point out that, despite the fact that there are medium-sized and small entities with strong balance sheets, competitive pressure will end up forcing them to integrate.
Ignacio Ruiz-Cámara, partner in charge of Banking and Finance at Allen & Overy, considers that “without a doubt” there will be integrations between the smallest banks remaining in the country. “It is a market in which small entities will struggle to survive, especially in a low rate environment, although it seems that it is changing. Even so, the current competition and the pressure on margins will not allow anyone to stand still, perhaps Maybe not through complete bank mergers, but certainly with corporate operations that change the profile of the entities,” says Ruiz-Cámara.
In addition, other sources assure that, although smaller banks currently do not have as much pressure to go digital because their current customer profile does not require it, they have to prepare their technological change for the user of tomorrow, which will mean investment efforts in digitization, despite the fact that they do not have as strong a financial muscle as that of the large banks.
However, the current situation and profile of Spanish medium-sized and small entities is very different, distancing possible unions. Banco Sabadell closed the door to integrations last year after and advocates moving forward alone with rising results and a rising price, especially with the forecast rate hike. The bank is strengthening its commitment to continue alone.
regional roots
For Kutxabank, although it has stated on several occasions that it is not closed to mergers due to the profitability problems that the sector has due to low rates, its regional link is presented as a handicap by politicians, who cling to avoiding loss from the bank. In fact, the lehendakari, Iñigo Urkullu, was controversial at the end of 2020 -when a three-way union between BBVA, Sabadell and Kutxabank was rumored- with the aim of maintaining the entity’s management capacity, roots and independence.
Abanca’s strategy is to continue with mergers, but for now as an absorbing entity. The bank of Galician origin has carried out six acquisitions in the last six years, increasing the volume of assets by 70% since then. Finally, Ibercaja, although openly ruling out mergers, is in the sights of analysts as the most conducive to integration, after already delaying its IPO for two years due to market volatility. However, if it does not jump to the parquet, the bank would have to create a reserve fund as an alternative that allows the savings bank law and that Kutxabank did. The entity, however, although , has not closed the door.