Misc 17/11/2020

BBVA, the new Catalan financial giant

It has a 25% quota and if it acquires the Sabadell it will own 8 of the 11 Catalan entities that existed in 2008

Albert Martín
3 min
Seu del BBVA a Madrid.


A Spanish giant which is retiring from an international adventure

In recent years, BBVA has been the second largest bank based in Spain. In addition to being the second largest in the Spanish market, behind CaixaBank, it is also the second largest abroad: until this week, it had subsidiaries in the United States (this Monday it announced its sale for 9.7 billion euros), Turkey, Colombia, Mexico, Peru and Argentina. In recent years it has left China, Puerto Rico and Chile. With data from the end of the first quarter, it had assets of 730 billion, 78 million customers and 126,000 workers.

Current situation

The United States and the pandemic fully impact results

The low interest rates, the Spanish economic situation which had not improved any further before the pandemic and the new crisis have had an impact on BBVA, as they have done for other European banks. Last year it earned more than 3.5 billion euros, and this year up to September it earned only 15 million. But most of these weak results are due to the deterioration of its brand in the United States, which led to losses of more than 2 billion in the first quarter.


A digital pioneer and a Turkish CEO

The abrupt departure of Francisco González left Carlos Torres as president of the bank at the beginning of last year. Torres is a pioneer in the fintech sector in Spain and his interest in Banco Sabadell shows that he maintains his predecessor's interest in Catalonia. His right-hand man is the Turk Onur Genç, who was signed up in 2018.

Catalan bet

No one has believed so much in the potential of the Catalan economy

BBVA's presence in Catalonia has grown steadily over the last decade. And this has been the case thanks to an aggressive acquisition policy. BBVA bought Unnim in 2012 and CatalunyaCaixa in 2014. Thus, the entity has under its belt six of the ten former Catalan savings banks (Catalunya, Tarragona, Manesa, Sabadell, Terrassa and Manlleu). But with the absorption of Banco Sabadell, it will aslo include Caixa Penedès's old network, absorbed by Sabadell. The summary is striking: of the 11 large financial institutions in Catalonia in 2008, eight were absorbed by BBVA. Of the remaining, CaixaBank absorbed Caixa Girona and Caixa Laietana. BBVA currently has approximately a 25% market share and with the purchase of Sabadell (17%) can even aspire to discuss the leadership of CaixaBank, which has just announced the merger with Bankia.

Despite its strong commitment to Catalonia, workers from CatalunyaCaixa have denounced certain aspects of the integration, such as the cornering of Catalan in the bank's communications.


A long-running rivalry with Banco Santander

Despite BBVA's Biscayan origins, Francisco González's nearly two decades of power have turned it into an archetypical Madrid-based bank. This has led to a business culture that the sector defines as "aggressive". For a time, there was a dispute between José Ignacio Goirigolzarri, Gonzalez's number two, and the chairman. Those who lived through it explain that this clash reflected a conflict between those who wanted a bank like those in the tough City of London and those who wanted a friendlier entity. González won and BBVA is a bank that is very focused on objectives and aggressive in its dealings with customers and employees. As a result, the rivalry with Santander has been long and deep over the years. Santander, which continues to be larger on a global scale, has been overtaken in Spain by both CaixaBank and the likely BBVA-Sabadell merger.


FG's long shadow

FG stands for Francisco González and in Madrid it is synonymous with problems. The tempestuous character of the entity's president was well known for years. To become president, he used his complicity with Aznar and his government and had to leave the honorary presidency of the bank cornered by the Villarejo case. The investigation is still ongoing, but the recordings that have become known so far prove that FG hired the controversial commissioner Villarejo for years to attack his rivals in the bank.