Bank mergers CaixaBank – Bankia case

Bank mergers? CaixaBank – Bankia case

Spain prospects 

General idea

There is a strong lack of profitability in the banking sector, which seems to be a new stumbling block in this area that has been so hard hit in recent months.

To solve this problem, the ECB has recommended to all banks in the euro area that they should give the go-ahead for new bank mergers.

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Future scenario

But why are they so unprofitable? Well, the main problem is the very low interest rates on profits in their sector.

Another major problem is the current crisis. Banks have to cope with numerous debts that do not seem to be collected, costs in workers or in the dismissal of these…

This is why an apparently “easy” solution is found in mergers.

This allows the business to reduce costs by eliminating redundancies (office closures, redundancies…). Moreover, another of the great benefits of mergers is that they will be able to raise prices to end customers due to the high degree of monopoly they will obtain.

This is where the ECB comes in, asking banks to internationalise, in order to obtain a maximum of 20 banks in the whole euro zone, and not 62 as we have seen over the last decade, counting only Spain.

In the case of the merger of CaixaBank and Bankia, another piece of good news is that by CaixaBank acquiring the shares of Bankia, part of the shares that were at the disposal of the state can be recovered, thus recovering the bailout that took place with public money.


By way of conclusion, we can therefore say that this is good for the European integration called for by the ECB, as it will allow the banking sector to be less fragmented. Moreover, as we have said, the banks will be able to obtain higher profits because they will reduce costs.

The negative side is that if they manage to have such a monopoly and get out of their numbers, it could lead to financial crises at a global level, as happened in the case of Lehman Brothers, so they have to be very careful.


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