The French BPCE enters the capital of Banc Sabadell as a stable partner

BarcelonaBanc Sabadell, with the new stage under Marc Armengol as CEO and with the BBVA takeover bid in memory, is pressing the accelerator. The French BPCE, which groups entities such as Banque Populaire and Natixis and is the second-largest banking entity in France, has entered the capital of the Valles-based bank with around a 7% stake, valued at approximately 1.2 billion euros.

The operation, agreed "amicably" by both parties, was carried out through market purchases and financial instruments. Both BPCE and Banc Sabadell highlight the French group's intention to become "a stable and long-term shareholder," which hinders possible new takeover bids for the Catalan bank, with a new stable partner like the insurer Zurich, with 4.947%.

A director

There is also the intention for it to be represented on the Banc Sabadell board of directors with a member, who will replace one of the 15 current ones when the mandate expires, according to sources from the Catalan entity. The operation, which will not prevent Sabadell from maintaining its management autonomy, has a "very clear logic," according to sources from the Catalan bank.

Strategic cooperation

The two parties also have the intention of exploring a strategic business cooperation "to make BPCE's capabilities available to Banco Sabadell's clients and generate additional value jointly". The French group, which has almost no presence in the Spanish market, does not intend to exceed the 9.9% capital threshold of Sabadell, which would force it to request authorization from the Spanish government. In any case, Sabadell maintains its roadmap alone and focused on the Spanish market after the sale of its British subsidiary TSB to Banco Santander.

BPCE, which prevailed last year over CaixaBank in the bid for the Portuguese bank Novo Banco for 6.4 billion euros, is the second-largest banking group in France and the fourth in the Eurozone by capital. One of the objectives of the agreement with Sabadell is for the French group to eventually become a strategic ally in some financial activities, as Zurich is in insurance and Amundi is in investment funds. In fact, both entities state that they are studying "business opportunities, particularly in corporate and investment banking, equipment leasing, consumer credit and international client business".

It is expected that these talks will conclude at the beginning of next year, and they aim to "identify areas where cooperation can support the development of Banco Sabadell in Spain and, at the same time, strengthen the European presence of BPCE".

The French group was born in 2009 as a result of the merger of the networks of cooperative banks (banques populaires) and savings banks (caisses d'épargne). In fact, its acronym corresponds to the name Banques Populaires Caisse d'Épargne. As a cooperative group, it has a total of 36 million clients worldwide and 110,000 employees.

Sabadell's chairman, Josep Oliu, highlights in a statement that the operation "constitutes a recognition of the entity's standalone project" and "reinforces the strength and stability of the shareholder base." Armengol, for his part, considers that BPCE's entry into the capital reinforces the bank's capacity "to continue executing the strategic plan and generate sustainable long-term value." It is, he adds, a partner "with a long-term vision and extensive experience" that will allow it to complement Sabadell's capabilities and help it "to successfully take advantage of the opportunities offered by the market."

The CEO of BPCE underlines that the entry into Sabadell's capital represents "an additional step in the group's growth and diversification strategy" in Europe. He also highlights that the French group shares "the firm conviction of the importance of being deeply rooted in the territories and markets" where they operate, coinciding with the strategy of the Catalan entity.

With Armengol at the helm of management, Sabadell maintains the strategy of focusing on the Spanish market. The bank, which maintains its commitment to strengthening the SME business, has decided to concentrate the activity of its central services in its three main headquarters, located in Sant Cugat del Vallès, Alicante, and Madrid.

It has also reorganized its structure to accelerate digitalization in the retail business, reinforce the commitment to relationship banking –companies, private banking, and personal– and promote the use of artificial intelligence internally. Among the main novelties is the creation of the corporate transformation and artificial intelligence area, integrated into the strategy department.