Stakeholders of Spain’s state-backed lender Bankia had approved a merger on Tuesday with its larger rival Caixabank, cementing a path to creating the country’s No. 1 domestic lender having over €600 billion in assets.
In point of fact, latest move from Bankia shareholders came forth roughly a couple of months after the Valencia-headquartered Spain’s largest lender Caixabank had agreed to an all-stock €4.3 billion takeover deal for Bankia, while the merged entity has been expected to slash as many as €700 million in annual expenses.
Bankia shareholders approve €4.3bn Caixabank merger
Aside from that, Bankia shareholders’ approval for a merger with its bigger rival Caixabank had largely reflected a growing rancour in European banking industry which had been contracted to just 12 lenders from 55 following a flurry of wears of tears in the period of Great Financial Depression of 2007-2009, while a global pandemic resurgence at large coupled with an ultra-low interest rates had led to a slew of cost saving measures involving a series of merger and acquisitions this year.
Nonetheless, Tuesday’s blessing from the Bankia shareholders followed a failed merger talk between Spanish lender BBVA and its smaller rival Sabadell which in effect could have been created the country’s second-largest lender with a combined asset worth more than €600 billion, dealing a fresh blow to the bloc’s third-largest economy’s struggling banking sector.
Nonetheless, before taking into effect the Caixabank-Bankia merger would require authorization from Spain’s Economy Ministry, while the deal would also be reviewed by Spanish and European Union regulators. Meanwhile, citing an out-and-out optimism over Tuesday’s development to creating the Spain’s largest financial services provider, Bankia Chair Jose Ignacio Goirigolzarri said to the shareholders in a statement, “The combination of both lenders will lead to a generation of synergies that will allow a much higher profitability than what could be achieved by both entities separately”.