Sum and continued closure of banking offices. Spain’s five largest financial institutions, Caixabank, Santander, BBVA, Sabadell and Bankinter, have closed almost 2,500 branches over the past three years, according to figures they published in their quarterly results. In total, these five banks had nearly 8,900 branches in Spain at the end of last September. At the end of the same month of 2021, they reached 11,400 offices.
These are years when their profession has evolved considerably and where all companies have tended to strengthen their digital activity to the detriment of their physical commercial network.
Thus, at the end of 2021, they had resumed normal activity after the pandemic and noted that the interest rates set by the European Central Bank were at 0%. Since then, after the inflationary spiral caused by the war in Ukraine, these rates have continued to rise and increase bank margins and profits. For comparison, these five large entities earned, across all activities and countries where they operate, 11.972 million euros between January and September 2021. This year, over this same period, they added a profit of 23.656 million. In other words, in three years, they have earned almost double.
In this context, where they benefited from the monetary policy decided in Frankfurt, they withdrew their presence through the traditional commercial network. If you look at the data, the bank with the most branches in Spain is Caixabank, which has 3,571 offices in Spain. It is followed by BBVA, with 1,881 and Santander, with 1,832. The fourth is Sabadell, with 1,155 and the fifth, Bankinter, with 446, a figure that has remained unchanged in recent years. If the merger between BBVA and Sabadell goes through, the new bank would become the second entity in Spain in terms of number of offices, with more than 3,030. The following graph summarizes the evolution of the branches in recent years.
The starting point for this comparison is 2021. This is a key year to see how the commercial banking network has shrunk because it was at this time that the integration of Bankia and Caixabank took shape. Concretely, the latter added more than 2,100 branches to the former.
If we compare the data, at the end of the third quarter of this year, Caixabank has practically the same number of branches as in September 2020, when it was still alone, without Bankia. There are now more than 3,571. There were then more than 3,600, as detailed in the quarterly information sent to the National Securities Market Commission (CNMV). Thus, if we consider the data from September 2021, Caixabank has closed more than 1,800 branches throughout the territory. Sabadell, at 354 and BBVA, at 225. And the bank with the least, Santander, with 120.
However, in the case of the entity chaired by Ana Botín, we must look a year earlier, because at the end of 2020 it announced the closure of just over 1,000 offices, in addition to a Regulatory File of Employment (ERE) for 4,000 people. It’s not the only bank to have laid off its workforce, as the entire financial sector has made more than 19,000 layoffs post-pandemic.
While waiting for BBVA’s public purchase offer for Sabadell
The process of commercial withdrawal from the financial sector was accompanied by concentration. It is worth remembering that over the last decade, particularly following the 2009 financial crisis, the sector has gone from almost 40 banking entities in Spain to less than a dozen. Now, if the integration between BBVA and Banco Sabadell materializes, this process would experience a new turning point. In this topic we explain how a merger would accentuate the lack of competition in the Spanish financial system.
For the moment, the purchase offer (OPA) is still in its initial stages, pending the evaluation carried out by the National Markets and Competition Commission (CNMC), which must first decide whether she approves the terms of the proposal. – in what is called Phase 1 – or extends it to study the integration in more detail – Phase 2 – which would delay the conclusion of the takeover bid.
For now, what we know is that BBVA has announced the number of branches it will close. In total, he highlights that 300. He commented on it this summer, during the presentation of the results of the first half of the 2024 financial year, when he recognized that he will have to carry out a process of “rationalization” of the commercial network . . These are the closures that it is planning, because in total it estimates that it would have 870 offices located less than 500 meters from each other. Its CEO Onur Genç then justified that, if the merger took place, only “a percentage less than 10% of the sum of the network of the two entities” would be closed.
This store closure affects rural areas more. There, the entities have opted for alternative services, such as “ofibus” which serve several localities. According to the Bank of Spain, more than 500 mobile offices are already operational. Furthermore, the Spanish Banking Association estimates that ofbuses serve nearly 830 small municipalities, where more than 180,000 people live. The forecasts of this association for the end of this year are that in total there will be 1,500 sites where banks will operate with this type of mobile offices.
