Spain’s Unicaja and Liberbank to merge and become Unicaja Banco

THE Bank of Spain has indicated that it is very much in favour of Spanish banks mergers in order to ensure that they will be strong enough to weather any financial storm caused by the Covid-19 pandemic.

Already Caixabank and Bankia have agreed terms whilst the proposed merger of BBVA and Sabadell was called off after just two weeks of discussions.

The next joining of two banks is will Unicaja and Liberbank which would make the new entity known as Unicaja Banco, Spain’s fifth-largest bank with assets in the region of €109 billion after agreeing terms in principle.

Unicaja with greater market value and assets is due to take 59.5 per cent of the new bank with Liberbank taking 40.5 per cent with the two respective Bank chairmen taking senior positions for two years.

With interest rates at all time lows and the fear of financial difficulty for lower paid workers as well as those who have lost their jobs due to the pandemic, many banks can expect to have to accept short term losses.

This consolidation will however allow them to rationalise their businesses, reduce staff, cut costs and be in a position to tackle both national and international markets in the future.

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