The State acknowledges that the CaixaBank-Bankia merger reduced financing for SMEs.

MadridFive years ago, the financial sector in the State suffered an earthquake: the announcement of the CaixaBank-Bankia banking mergerAt that time, the Vice President of the European Central Bank, Luis de Guindos, was already advocating that "banks should begin a new merger process quickly and urgently," while the then Governor of the Bank of Spain, Pablo Hernández de Cos, asserted that in Spain "there was room for mergers." The merger gave rise to the first Spanish bank and came about after an agreement was reached between the central government—the majority shareholder in Bankia with 62% of the share capital—and the blue star bank—La Caixa, through its investment arm, Criteria, was the largest shareholder in CaixaBank.

Pedro Sánchez and Isidre Fainé piloted the negotiations and their outcome. Now, five years later, and in the midst of another earthquake in the sector—BBVA's hostile takeover bid for Banc Sabadell–, the Spanish government acknowledges in black and white that the merger it sponsored had a negative impact on SME financing, but also on the workforce. In fact, the precedent serves to justify the additional condition for reasons of public interest in BBVA's hostile takeover bid for Sabadell, which implies not being able to merge for at least three years.

In the case of the CaixaBank-Bankia merger, the Spanish government acknowledges that, in terms of SME financing, "there were substantial reductions in exposure [to financing] to the SME segment and to individual entrepreneurs in the years immediately following the merger," as stated in the el AHORA agreement. It also acknowledges a similar impact in the Unicaja-Liberbank merger. "It is significant that in those cases where the absorbed entity had greater exposure to this segment [SMEs], it can be seen that the new entity has progressively converged to the levels of the absorbing bank," it adds.

As a result of this outcome in previous mergers, the Spanish government concludes that "it is essential for the general interest to avoid abruptly altering the corporate financing model" of the banks affected by the takeover bid, namely BBVA and Sabadell. The government points out that a loss of funding for SMEs or individual entrepreneurs could be "especially sensitive" in companies that are barely growing or are undergoing transformation.

The workforce is also in the spotlight.

But the CaixaBank-Bankia case isn't just being used to target access to credit for small and medium-sized businesses. It's also being used as a precedent when assessing the potential impact that BBVA's takeover bid for Sabadell could have on the workforce, specifically in terms of job losses (this is one of the ways in which the bank proposing the transaction seeks cost savings).

"In recent takeovers followed by mergers in the financial sector, extraordinary job losses have been observed, exceeding the trend observed at the sector level," explains the government. "The average annual workforce reduction ratio at CaixaBank, on the one hand, and at Bankia, on the other, was around 7%," explains the executive, who adds that one year after the merger, "the employment level was 14% lower [at each of the entities] than it was in the year prior to the merger." That is, one year after the merger between the two banks, twice as many jobs disappeared compared to the trend recorded before the takeover. The same is true for Unicaja and Liberbank.

This abrupt impact in such a short period of time (one year apart) is what the Spanish government wants to avoid in the event of a possible merger between BBVA and Sabadell, provided the two entities are kept separate. "We want to promote, through a single condition, an orderly transition [of the merger] that contributes to preserving these intangibles [jobs], and thus the affected general interest," it explains.

"An adjustment in employment as a result of the merger [between BBVA and Sabadell] could, in accordance with these precedents [CaixaBank-Bankia and Unicaja-Liberbank], have significant effects in terms of jobs, which would be accompanied by a high social and human cost." Which also links job losses to increased costs for Social Security due to increased benefits such as unemployment benefits.

Today, the State, through the Executive Resolution Authority or Fund for the Orderly Restructuring of Banking Services (FROB), remains a shareholder in CaixaBank (the Bankia name has disappeared). Specifically, the financial institution controlled by the La Caixa Foundation (31.2%) has the State as its second largest shareholder, with 17.9%. Last year, the Spanish government approved maintaining its stake in the capital and not selling it for two more years, until December 2027.