Maintaining branches and divestitures: the conditions for the last major banking merger

Maintaining branches and divestitures: the conditions for the last major banking merger
Maintaining branches and divestitures: the conditions for the last major banking merger

Barcelona, ​​May 18 (EFECOM).- BBVA’s takeover bid for Banco Sabadell puts the spotlight on the regulators who will analyze whether the operation affects competition, an exercise that will have as a reference the last major Spanish banking takeover, that of Bankia by part of CaixaBank, legally completed in 2021.

On that occasion, the third and fourth entities in the country merged, creating the market leader in all retail banking segments. The National Markets and Competition Commission (CNMC) gave the green light to the operation, but imposed certain conditions on CaixaBank, including maintaining branches and disinvesting in joint stakes with Bankia.

The regulator considered that the absorption did not pose a threat to effective competition in corporate banking, investment banking, cards, POS, insurance production and distribution, and management of funds and pension plans, given that the addition of Bankia in these areas was reduced.

However, its analysis concluded that there was a risk for the branch market, and it ordered CaixaBank to maintain offices in municipalities where there were no competitors in order to avoid the financial exclusion of the population.

The CNMC also identified 86 postal codes in Spain in which the entity resulting from the merger was in a monopoly or duopoly situation, and considered that the low competitive pressure in those areas would give it high market power, with possible adverse effects for consumers. consumers.

The regulator estimated that in some of these environments there could be a worsening of commercial conditions for Bankia clients.

To mitigate this risk, CaixaBank undertook to maintain the absorbed bank’s clients under the same conditions and terms as their subscribed products for a period of at least three years.

He also assured that in the postal codes identified as especially sensitive to the operation, no commissions would be charged to Bankia clients for carrying out over-the-counter operations when that same procedure would have been free for them.

CaixaBank also had to divest from a series of companies, all of them in the payment methods business, in which the sum of stakes together with Bankia exceeded the maximum established in the statutes of those firms for each shareholder.

The bank withdrew 16.21% of its participation in the Spanish Society of Payment Methods (ServiRed), which established a participation limit of 25%, and 9.44% of the Payment Procedures Society (Bizum), with a limit of 24%.

It also divested 11.04% in Redsys Processing Services, where the maximum participation was 24.9%, and 3.9% in the Card and Payment System, with a limit of 25%.

When judging the risks of the merger, the CNMC also considered a possible breakdown of the existing agreements for the shared use of ATMs between Bankia and ING, as well as with Euro6000 and Banco Sabadell.

To mitigate the possible impact on consumers, CaixaBank agreed as a condition to offer the clients of these entities access to the ATMs that were owned by Bankia before the operation for a period of 18 months under the same conditions as until then.

In the event of closure of Bankia ATMs as a result of the operation, it also committed to giving customers of those entities access to the nearest CaixaBank ATM. EFECOM

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