BBVA And Sabadell Banks In “Possible Merger” Talks

Following the announcement in the United States of the sale of Spanish bank  BBVA’s US retail operations it has also been confirmed in Madrid it is in talks with Spanish rival Banco Sabadell, in a possible merger between the two financial institutions.

Shares in both banks rose on the release of the statement from  the National Securities Market Commission (CNMV) yesterday.

The statement also announced that a due diligence process will begin with the appointment external advisers to present the two boards with a proposed merger agreement but that ‘there is no certainty that it will be adopted’.

Banco Sabadell has a market capitalisation of €2.3bn compared with BBVA’s €24.5bn.

If the merger does go ahead the resulting entity will have assets of around €700 billion and rival Spain’s biggest lender Banco Santander.

The announcement comes amid significant consolidation in the once fragmented Spanish banking sector.

In September a merger was announced between CaixaBank and Bankia – itself the result of an earlier merger of several regional savings banks – and which is expected to be completed by early 2021.