Concerns Mount Over BBVA's Takeover Bid for Sabadell Amidst Warnings of Financial Setbacks
Business leaders and unions express fears that the BBVA acquisition of Sabadell could result in significant losses in funding for small and medium-sized enterprises (SMEs) and job losses.
The ongoing bid by BBVA for Banco Sabadell is raising alarms among business organizations and labor unions in Spain.
On Tuesday, Josep Sánchez Llibre, president of the Catalan employers' association Foment del Treball and vice president of the CEOE, along with Pepe Álvarez, secretary general of the UGT union, voiced serious concerns about the potential repercussions of this banking consolidation.
Both leaders assert that if the bid succeeds, it could lead to a loss of €75 billion in financing for SMEs and self-employed workers, alongside numerous job layoffs.
Sánchez Llibre articulated that in banking mergers, the expected benefits rarely materialize fully.
He illustrated this with the statement, "In bank mergers, two and two never sum to four; they may sum to two, two and a half, or three at best." He further emphasized the potential challenges that would arise if Sabadell ceases to exist, proposing that new banking institutions would need to be created, likening this necessity to historical precedents when Catalan textile entrepreneurs had to reinvent banking systems in the 19th century.
The €75 billion mentioned by Sánchez Llibre represents half of the current lending that Sabadell provides to SMEs and self-employed individuals.
He attributed this figure to his own experience, suggesting that a similar scenario could unfold as did after the 2008 financial crisis following the collapse of Lehman Brothers, during which many businesses closed due to lack of financing.
Both Sánchez Llibre and Álvarez referenced legal complaints submitted to the National Court by their organizations, urging immediate legal measures to halt the takeover until the National Commission of Markets and Competition (CNMC) can examine the case.
These appeals have been accepted for consideration and await resolution.
Álvarez reiterated the union's clear opposition to the takeover, highlighting the already significant workload of the employees at both financial institutions, pointing out that Spain has the fewest bank branches per capita in the EU.
“Financing conditions for the Spanish productive fabric are at stake, along with jobs and the physical well-being of workers in the sector,” Álvarez stated.
He also represented the UPTA association of self-employed workers, asserting that if the takeover proceeds, the impact on credit availability for this group would be substantial.
These comments were made during a forum focused on the financial market analysis and its impact on Spanish SMEs, organized by Cepyme in collaboration with regional employers' associations from Catalonia and Galicia.
Leadership from both territorial business organizations set aside internal differences to collectively advocate for improved financing access for SMEs.
They extend public support for Ángela de Miguel, a rival of Cepyme president Gerardo Cuerva.
Cuerva noted that SMEs are still about €15 billion short of the credit access levels they enjoyed prior to the pandemic.
While he encouraged small businesses to explore alternative financing options, he acknowledged that most SMEs and self-employed individuals rely on commercial banks for their funding.
He praised these banks not only for their financial services but also for their role in providing comprehensive services to SMEs, facilitating cash management, and offering advisory services that integrate them as partners in their businesses.
In response to the criticisms from business leaders, sources from BBVA maintained that their merger with Sabadell represents a robust commitment to the business community, asserting that Sabadell's customers would benefit from enhanced support for growth.
BBVA highlighted its leadership in acquiring SMEs, boasting a market capture rate of 26.5% over the past year, and reported a 16% rise in their financing to businesses in Spain over the past four years, contrasting this with a 5% reduction in overall financing within the sector.
They cited almost €20 billion in financing directed to Catalonia in the last year as evidence of their dedication to supporting local enterprises.
In contrast, Banco Sabadell underscored that widespread apprehension voiced by business associations, chambers of commerce, and unions across the country indicates a critical issue.
They assert that this takeover poses a serious threat to Spanish SMEs and, by extension, to the broader economy.
On Tuesday, Josep Sánchez Llibre, president of the Catalan employers' association Foment del Treball and vice president of the CEOE, along with Pepe Álvarez, secretary general of the UGT union, voiced serious concerns about the potential repercussions of this banking consolidation.
Both leaders assert that if the bid succeeds, it could lead to a loss of €75 billion in financing for SMEs and self-employed workers, alongside numerous job layoffs.
Sánchez Llibre articulated that in banking mergers, the expected benefits rarely materialize fully.
He illustrated this with the statement, "In bank mergers, two and two never sum to four; they may sum to two, two and a half, or three at best." He further emphasized the potential challenges that would arise if Sabadell ceases to exist, proposing that new banking institutions would need to be created, likening this necessity to historical precedents when Catalan textile entrepreneurs had to reinvent banking systems in the 19th century.
The €75 billion mentioned by Sánchez Llibre represents half of the current lending that Sabadell provides to SMEs and self-employed individuals.
He attributed this figure to his own experience, suggesting that a similar scenario could unfold as did after the 2008 financial crisis following the collapse of Lehman Brothers, during which many businesses closed due to lack of financing.
Both Sánchez Llibre and Álvarez referenced legal complaints submitted to the National Court by their organizations, urging immediate legal measures to halt the takeover until the National Commission of Markets and Competition (CNMC) can examine the case.
These appeals have been accepted for consideration and await resolution.
Álvarez reiterated the union's clear opposition to the takeover, highlighting the already significant workload of the employees at both financial institutions, pointing out that Spain has the fewest bank branches per capita in the EU.
“Financing conditions for the Spanish productive fabric are at stake, along with jobs and the physical well-being of workers in the sector,” Álvarez stated.
He also represented the UPTA association of self-employed workers, asserting that if the takeover proceeds, the impact on credit availability for this group would be substantial.
These comments were made during a forum focused on the financial market analysis and its impact on Spanish SMEs, organized by Cepyme in collaboration with regional employers' associations from Catalonia and Galicia.
Leadership from both territorial business organizations set aside internal differences to collectively advocate for improved financing access for SMEs.
They extend public support for Ángela de Miguel, a rival of Cepyme president Gerardo Cuerva.
Cuerva noted that SMEs are still about €15 billion short of the credit access levels they enjoyed prior to the pandemic.
While he encouraged small businesses to explore alternative financing options, he acknowledged that most SMEs and self-employed individuals rely on commercial banks for their funding.
He praised these banks not only for their financial services but also for their role in providing comprehensive services to SMEs, facilitating cash management, and offering advisory services that integrate them as partners in their businesses.
In response to the criticisms from business leaders, sources from BBVA maintained that their merger with Sabadell represents a robust commitment to the business community, asserting that Sabadell's customers would benefit from enhanced support for growth.
BBVA highlighted its leadership in acquiring SMEs, boasting a market capture rate of 26.5% over the past year, and reported a 16% rise in their financing to businesses in Spain over the past four years, contrasting this with a 5% reduction in overall financing within the sector.
They cited almost €20 billion in financing directed to Catalonia in the last year as evidence of their dedication to supporting local enterprises.
In contrast, Banco Sabadell underscored that widespread apprehension voiced by business associations, chambers of commerce, and unions across the country indicates a critical issue.
They assert that this takeover poses a serious threat to Spanish SMEs and, by extension, to the broader economy.
Translation:
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