Joseph Oliupresident of Sabadellconsiders that there is “serious doubts” compared to the value that would be created by a merger between BBVA and Sabadell in the event that the takeover is carried out with the support of its shareholders and that of the authorities.
The banker participated this Monday in the annual event of the Spanish Chamber of Commerce in the United Kingdomwhere he attended as the guest of honor.
Speaking in this forum, Oliu said the hypothetical impact of this merger, as well as its rejection by the government, “introduces considerable execution risk for the buyer”.
Europe Press
Bilbao
“All this throws serious doubts about the value that the operation would be expected to create, given that these aspects could erase the cost-benefit ratio and the apparent value offered”, said the president of Sabadell.
According to him, an operation with these characteristics faces two problems: the limits of competition and the need for stronger banks. But for Oliu, The size of an entity is “neither a requirement nor a guarantee of solvency” and “increasing the relative size of a bank in a market inevitably leads to greater oligopolistic power, to the detriment of consumers.”
Bank consolidation
In line with the need for strong banks, Oliu said he considered “desirable” that the Banking Union in the Eurozone be complemented by the creation of the single deposit guarantee fund in the European Union, which, for the moment, is in the hands of the European Council.
In fact, he believes that cross-border mergers can be a solution to create “bigger and stronger banks” when “domestic consolidation reaches its limits due to competition”.
“Consolidation is undoubtedly a way to strengthen the financial system, but consolidation is not always a good thing and does not always create value for shareholders,” Oliu stressed.
And he added: “If consolidation processes result from a vision that can be shared and accepted by those involved, such as workers, customers, society and politicians, their value will increase. Otherwise, their value will be threatened. “.
This is why, for the banker, “Sabadell and BBVA offer more value separately than together.”
Indeed, for Oliu, Sabadell faces its execution risks as an independent bank and considers them “more manageable, at least immediately, than the execution risks raised by BBVA’s proposal”.
The president of Sabadell said that “other Spanish competitors have contacted the bank several times to consider a purchase or merger with another larger competitor.”
“These proposals have always been cordially rejected, as it has long been believed that the independence and development of the cultural identity of Sabadell offered a distinctive approach, which the company welcomed and in which the shareholders believe,” he said. he concluded.
