CaixaBank and Bankia, two of the largest financial institutions in Spain and Europe, are considering a legal merger of both entities as a measure to strengthen the country's financial stability and protect the interests of citizens in general.
The legal merger of two financial entities as important as CaixaBank y Bankia The issue is being debated this week within the financial sector. If the proposal is confirmed, CaixaBank expects to help the Spanish government recover part of the aid that Bankia received at the time of its rescue, aid that exceeds 24 billion euros. Likewise, this merger will give way to the creation of the largest national banking entity in Spain, which will house more than 50 thousand employees and will manage resources in the order of 650 billion euros in assets.
The new entity will position itself as the leading bank in Spain by assets and the third largest bank in the country by assets abroad, behind only banking giants Santander and BBVA. Although, to date, no exact date has been confirmed or established for the merger of the financial institutions, both have revealed their interest in a manifest issued to the National Securities Market Commission (CNMV)), where the intention of both entities to carry out the legal merger.
Now, if CaixaBank and Bankia merge, what will happen to the millions of users and customers of these entities? How will this merger affect customers? Let's see.
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The changes that await
If the legal merger between CaixaBank and Bankia takes place, the clients of both entities will suffer several consequences during and after the process. The first of these is the change of the account number, since the merger of Bankia, being absorbed by CaixaBank, will inevitably cause the account number to change. IBAN (International Bank Account Number) or Bankia's international bank account number changes. This change could leave millions of users without access, for a period of time, to the banking products offered by the entity, although it is estimated that the commercial policies of the new entity will allow the association of the previous account number with the new one, allowing the automatic deposit or withdrawal of funds in the new account.
Likewise, the commercial policies of the new entity may vary from those managed by CaixaBank and Bankia independently. If the commercial policies of the new entity vary, it could affect the management of products and services, such as mortgages, loans, fixed-term deposits, credit cards, among others, although we will have to wait until the merger is finalized to find out.
Those users who have guaranteed funds through the Deposit Guarantee Fund, which supports both entities, could be left unprotected if their funds exceed 100 thousand euros. Let us remember that the Deposit Guarantee Fund is a fund that backs up to 100 thousand euros per account holder, both for CaixaBank and Bankia. Therefore, if a holder has accounts in both entities, the merger of these may leave the funds of those holders that exceed or exceed 100 thousand euros unprotected.
Finally, the legal merger of CaixaBank and Bankia may lead to the closure of several branches and the dismissal of a significant number of public employees.
The merger may also lead to an increase in costs for some services, as competition in the sector would be reduced. On the other hand, customers of other banks related to Bankia may be affected, especially those who use the ATM services free of charge.
Current economic and financial outlook
For years, the possibility of Bankia being absorbed by a financial institution has been raised, among which CaixaBank has of course been a long-standing figure. Now, the current economic crisis and a decline in the positive outlook for the financial sector, if it can quickly emerge from the current situation, are driving the process of merging Bankia with one of its fiercest competitors.
If the merger goes through, the government will be able to recover part of the financial rescue of Bankia, which took place between 2012 and 2013, and in which the state invested more than 24 billion euros. Of this amount, only a little more than 3 billion euros has been recovered to date, hence the state's interest in accelerating this process. According to the Ministry of Economic Affairs and Digital Transformation, if the merger proposal is successfully concluded, the government will be able to recover part of the financial rescue of Bankia, which took place between XNUMX and XNUMX, and in which the state invested more than XNUMX billion euros. Orderly Bank Restructuring Fund (FROB) will analyse in detail and with absolute objectivity the perspective of generating value and optimising the entity's capacity to recover the aid provided during the rescue.
"As has been repeatedly pointed out, the Government has one priority in relation to Bankia: protecting the general interest of Spanish citizens, maximising the value of public participation and strengthening the country's financial stability. These are the principles that will guide any decision in this area."
Likewise, if the merger is approved, the European Central Bank will issue a detailed report on this integration, which will be evaluated and analyzed by the CNMC for its final materialization.
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