The Spanish banking sector has entered into a dynamic of consolidation so marked that not even entities that announce their merger rule out taking advantage of the opportunity, if it arises, to carry out a new merger with another bank. “Everything is possible”, they admitted yesterday Manuel Azuaga, president of Unicaja, and Manuel Menendez, CEO of Liberbank, in the announcement of the merger of both entities.
The priority is to carry out the merger between the two banks and to do so while complying with an agenda that indicates that the operation should be completed by the middle of next year. This is how it will be born Unicaja Bank, which will have more than 100,000 million euros in assets and it trusts that the advantages of gaining size will allow it to take positions in activities that were practically banned before and, on the other hand, it will give scope to apply a strong cost adjustment. The combination of both factors is what the managers of both entities defend as the key for the operation to make sense in terms of profitability, just what regulators like the Banco de Espaà ± a or the European Central Bank demand by pressing to expel small and vulnerable entities from the market in favor of fewer but stronger banks in their solvency.
Unicaja Bank will be headquartered in Malaga and will be the fifth largest bank in Spain. But even so it does not seem to be guaranteed its space and hence its top executives are open to “considering opportunities for the combined entity.”
Once the last formal obstacle was overcome, which was the agreement before the end of the year, the entities still have the work ahead of meeting the milestones that represent obtaining the approval of the shareholders’ meetings and the regulators to obtain forward the operation. The new bank will have a portfolio of 4.5 million clients and a workforce of 9,500 employees that, like the branch network, will have to be adjusted to adapt to the logic that has motivated the merger. The first two executives of the entities admitted that this will be the case, although they refused to make any kind of estimate to pass it on to the workers’ representatives in the first place. Menà © ndez indicated that in the process of making adjustments against capital in the amount of 1,200 million euros, of which 540 will be allocated to restructuring costs; 400 million to strengthen the balance sheet and improve coverage ratios, and 200 million to business restructuring.
With all these issues still to be specified, the biggest stumbling block encountered by the operation, referring to the governance of the future entity, is an open chapter. As leader of the Andalusian entity, Azuaga will remain as executive president and the first figure on the board of directors until mid-2023. It is the deadline imposed by the European Central Bank (ECB) for presidents to abandon their executive functions and hand them over to the CEO. At that time, Menà © ndez will submit his position to the vote of the board of directors, which will be made up of 15 members: seven proprietary members (four from the Unicaja Foundation and three from Liberbank); six will be independent (four and two for each bank, respectively); and Azuaga and Men Ãndez as executives.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
