The Spanish government and the Comisión Nacional del Mercado de Valores (CNMV) are preparing decisions that may complicate BBVA's public takeover bid for Banco Sabadell.

This ongoing regulatory scrutiny has raised alarms for Carlos Torres, president of BBVA.

Minister of Economy, Carlos Cuerpo, has expressed concerns regarding the potential impact on competition that such a merger could entail, indicating a stance that may differ from the technical assessments of regulatory bodies.

The Comisión Nacional de Mercados y de Competencia (CNMC) has suggested that it might authorize the merger, contingent on certain temporary remedies that are feasible for BBVA.

Cuerpo's current resistance hints at a government intent to impose stricter measures than those proposed by the CNMC, which complicates the takeover process for BBVA.

The Ministry of Economy holds the legal authority to modify any resolutions made by the CNMC.

Additionally complicating matters for BBVA is the recent announcement from Carlos San Basilio, the new president of the CNMV, who indicated support for delaying the takeover bid until the CNMC completes its investigation, expected in the coming weeks.

San Basilio has emphasized the importance of allowing investors full access to pertinent information before proceeding but has also delayed the launch of the bid for several weeks amidst a challenging international economic environment.

Despite a month-long wait since the announcement of the bid—initially made during the Catalan elections—investors are increasingly impatient.

During a recent event organized by the Asociación Española de Banca (AEB), Torres publicly conveyed his concerns regarding political interference in the regulatory process, even without directly naming the government or the specifics of the case.

He underscored the need for adherence to capital market rules during ongoing operations.

Cuerpo's involvement in the banking dialogue, although arriving late to the event, allowed for brief conversations with the industry leaders present.

He reiterated the government's reservations about the possible competitive ramifications of the merger.

While no details were disclosed about the government's intended severity regarding the merger, BBVA expressed limited operational margins until the bid is formally launched.

Meanwhile, Banco Sabadell officials maintain that the government has broad authority to revise any favorable approval from the CNMC.

In addressing the CNMV's postponement, Torres highlighted the importance of allowing shareholder decisions on such mergers.

He asserted the necessity for a robust banking sector capable of addressing financial needs amid current global challenges, asserting that size and scale are vital justifications for BBVA's acquisition of Banco Sabadell.

Observers noted that David Vegara, an executive at Banco Sabadell, attended Torres's remarks, although he did not comment during the session.

Héctor Grisi, CEO of Banco Santander, concurred with Torres on calls for less stringent bank sector regulations, pointing out that current regulatory burdens have become unmanageable.

Both leaders expressed optimism regarding the state of the Spanish economy, noting upward revisions in their economic forecasts amidst a strong labor market and an increase in mortgage demand.

Torres projected a 2.8% growth in Spain's GDP by 2025, surpassing many European forecasts, while Grisi highlighted healthy growth in the mortgage market.

Meanwhile, a legal challenge has emerged as the Audiencia Nacional has accepted a case brought by the trade union UGT against the CNMC for denying its participation in the merger investigation.

The court has granted the CNMC a 20-day period to submit related documents to ascertain the legality of the commission's decision to restrict participation to Banco Sabadell.

Other organizations, such as Cepyme and the Catalan business group Foment, have also announced plans to contest the CNMC's ruling.