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Spain: Banks in talks on potential merger

By  |  December 13, 2018

Spain’s Liberbank and Unicaja announced in regulatory filings that they had begun discussions about a possible merger, reported the Financial Times.

A combination would create Spain’s sixth-largest bank by assets, with a combined total of €95.9 billion (US$109 billion). Daragh Quinn, analyst at Keefe, Bruyette & Woods, said that gaining weight in the market was not the primary aim of a merger.

“It’s indicative of the revenue environment in Spain,” Mr Quinn said. “The reality for these banks is they’re not really going to get profitability up until interest rates go up. A merger, and the cost synergies that come with it, would be a way to improve profitability.”

Mr Quinn estimated that a merger could lead to a 15% reduction in the combined costs of the two banks, representing annual savings of €142 million (US$161.4 million). The two banks would complement each other geographically, with Unicaja’s retail operations concentrated in Spain’s south and Liberbank’s in the north.

Full Content: Financial Times

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