Daniel CaballeroSEGUIRMadrid Updated: Save Send news by mail electrónicoTu name *
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Carlos Torres, president of the BBVA , said two weeks ago, without euphemisms, that the bank will be in breach of its financial objectives. “We will have to review them, because the levels of profitability will be severely affected this year and next year,” he said in an interview in the “Financial Times”. Loud and clear, released a warning that hard times come. Did the voice in public to what the entire industry thinks in private. Large and medium facing a landscape uncertain for the Covid-19. The business plans provided are wet paper, and the strategy goes through two phases: survival first… and then we’ll see, with mergers in the air.
The European Banking Authority (EBA, for its acronym in English) released two weeks ago, a ball of oxygen to community banks to argue that their fundamentals are solid, and come much better prepared than the crisis of 2008. Both in terms of capital and liquidity. Are solvents, but the business will suffer. However, within the good, Spain remains at the tail to deal with the recession. The institution revealed on Monday that Spanish banks (the 12 analyzed) had at the end of 2019 with the lowest ratio of capital ( CET 1 fully loaded , which indicates the creditworthiness) of the Old Continent: by 11.9% compared to 14.8% of the european average. Only Kutxabank exceeds the average (16,9%); and non-supervised, is also Banca March with a ratio of 16.5%. Also, the European Central Bank (ECB) warned in its financial stability report that losses will be “significant”. What they have released both identical message is in the future: mergers -an appearance by the who have spent years pressing – will be necessary in the medium term.
medium-term, not short. Financial sources recognize that banking is now focused on serving the society, mitigate the economic crisis and try to take it on the chin. The results of the first quarter already showed that the picture is not anything flattering. is Banco Santander provisionó 1,600 million; BBVA, to 1,433 million; Caixabank, 400 million; Banco Sabadell, 219 million; Bankia, 125 million… All are arming themselves, at the expense of renouncing to register immediate benefits.
In memory are operations that failed in recent years as the of Unicaja Banco and Liberbank
The uncertainty is one of the words most frequently repeated in the sector. The financial institutions -like all businesses – they need certainty, to know what you’re facing. And, for the moment, the Covid-19 is an enemy that as soon as it seems to be gone, as he returns with more force. The feared resurgence of the end of the year keeps in suspense to the bench. 2020 is a year to win at shields financial, and 2021 for the start of the recovery. But, in any case, the time-limits will mark the course of the disease.
once you pass definitely, the health emergency it will be time to think about the next step. Financial sources indicate that the 12 entities supervised by the ECB might stay in a single digit. Don’t think about, both in large mergers or acquisitions between firms of greater size -Santander, BBVA, Caixabank…-, but the focus is put on those that are below those levels, the banking medium.
Scenarios of fusions
The sector, as it has been able to know ABC, opens to study possible operations when you hover the drama of the Covid . It all depends on how affected you exit each entity, because there can arise two scenarios of mergers: a by obligation, because of possible bankruptcies, and the economic sense that to have and the profitability that will provide shareholder.
Among the rumors of operations always abound with the names of Bankia and Banco Sabadell . And, also, of companies such as Unicaja, Liberbank, Ibercaja, Kutxabank, and Abanca. Precisely, the president of this last one, Juan Carlos Escotet, has been the one who has been open in public to possible operations. The banker defended, in addition to the financial muscle of the bank, who won $ 130 million in the first quarter, that his intention is to continue to grow either through acquisitions or mergers. Yes, always keeping Abanca control of the company that is alum. So, it is worth remembering that Abanca has been one of the entities most active in recent times with the integration of Banco Caixa Geral and the purchase of Eurobic. In the memory are operations that failed in recent years as the of Unicaja Banco and Liberbank. When everything seemed to be advanced, it is finished by twisting; and no possibility of resuming. That option is closed, in which it also threatened to intrude Abanca.
beyond the internal problems of the sector, the Bank of Spain warned recently of the threat posed to the industry, the “bigtech”, companies such as Amazon, Google, Apple, Facebook … made in an article published in your journal of Financial Stability, in which the author -Jorge Padilla, he pointed out that the entry of this type of business in the banking market may pose a risk to financial stability.
Many factors to take into consideration, but are summarised in an increase of the competition… and the pressure on the traditional sector, which could accelerate the process of concentration. This type of companies have data of millions of users on their storage centers that make them a rival really to be taken into account in the future.