Sabadell-BBVA: Customers speak

In May, it will be a year since BBVA launched a takeover bid for Banc Sabadell, which the Catalan bank's board described as hostile. It is the first such operation since the former Banco de Bilbao (now part of BBVA) attempted to take control of Banesto (now part of Santander) in 1987. and in Alicante in 2017.

The National Commission on Markets and Competition (CNMC) has moved the merger analysis to the so-called second phase, which lengthens the process and is being analyzed in greater depth. Everything indicates that the methodology will not change, as Sabadell is demanding, and will use the same one used in CaixaBank's takeover of Bankia, although the latter affected individuals, while the one BBVA is seeking has a significant impact on SMEs. And it appears that the CNMC will not impose any conditions (remedies (in legal terminology) so harsh that they make BBVA back down.

It will therefore be up to the government to decide on the merger, which it has opposed from the outset, arguing that it will reduce the credit supply for SMEs and the banking sector in Catalonia and the Valencian Community. The truth is that the takeover bid unleashed a barrage of criticism, not only from the political sphere—it took place on May 9, three days before the Catalan elections, and all parties spoke out against it—but also from the social and business worlds. Sabadell specializes in SMEs, one of its strengths, and companies fear that this value would be diluted within a large entity, which would also reduce market supply and, therefore, access to credit for the business community.

After months of advertising and public relations campaigns by both banks, the rejection of the operation continues, especially among Sabadell customers. Four out of ten customers of the Catalan bank would be willing to switch banks if the transaction goes ahead, and three out of ten would welcome a government ban, as reflected in the second wave of the ISPD/Netquest survey for ARA. This opposition, much higher among Sabadell customers than among those of both banks or BBVA alone, varies somewhat from the previous survey, which could be due to a certain cooling-off due to the passage of time and the way the transaction is dragging on.

In any case, customers, who are not usually heard in mergers, have spoken. Many of them have a stronger attachment to Sabadell than usual in the sector. There is a degree of emotion that the Vallesan bank's advertising messages have not captured so far. Furthermore, the survey reflects concern about possible branch closures and layoffs (worse service), as well as the rising cost of financial products. And something relevant: BBVA customers (43%), although to a lesser extent than Sabadell customers (69%), also fear the risk of oligopoly and reduced competition. It would be good if regulators would take note by listening to what customers say and anticipating the difficulties of a potential transaction.