A MAJORITY of CaixaBank's shareholders have voted in favour of a merger with partially State-owned entity Bankia – the result of which would be the largest financial firm on the high street.
Following an extraordinary general meeting, it was decided that the firm would continue under the name of CaixaBank, its head office would be in Valencia, and its subsidiary headquarters would be in Madrid and Barcelona.
CaixaBank chairman Jordi Gual says the takeover would create a 'more solid, efficient and profitable' corporation which is likely to become the biggest high-street bank in Spain, even larger than the result of the proposed merger between the BBVA and Banco Sabadell.
Over 15,400 shareholders – some present and some via their representatives, and who own 70.3% of CaixaBank's capital – took part in the meeting, although it is not clear how many voted in favour of the buyout.
Bankia – the result of a State bail-out of high-street entities Bancaja and Caja Madrid in 2012 when both were facing closure – would be completely swallowed up by CaixaBank, which would hold 74.2% of the capital to Bankia's 25.8%.
The move, and the resulting structure, were voted upon and agreed at an extraordinary shareholders' meeting Bankia held on December 1.
Having been given the nod by shareholders of both banks, the merger is likely to get under way within the first quarter of 2021 and be fully operational before the end of next year – subject to agreement by the relevant regulatory and competition authorities.
The latter could be key, since a potential BBVA-Banco Sabadell merger in addition to the CaixaBank-Bankia takeover would dramatically reduce consumer choice on the high street: Along with Banco Santander, customers in Spain would, effectively, only have three options for what is nowadays considered an essential public service.
Gual – now due to step down as chairman - defends the decision, though, on the grounds that CaixaBank 'needs to be ready for the demands in the business environment' arising through an imminent 'new wave of restructuring' in the banking industry.
And managing director for CaixaBank, Gonzalo Gortázar, calls it a 'great opportunity to create added value' for 'all stakeholders', including both banks' shareholders.
The buyout will allow the joint enterprise to save up to €1 billion a year in expenses - €290 million in major investments and around €770m in running costs – and, by the year 2022, an improvement of between one and two percentage points in return on tangible equity (RoTE).
With the pandemic still an issue, Gortázar admits he is unable to predict likely profit increases over the next few years, but using data reached through recent consensus among analysts, a post-takeover situation could see RoTE hover around 8% and dividends on shares rise by about 28% by the year 2022.
The stock swap ratio has been set at 0.6845 new ordinary shares in CaixaBank per Bankia share, plus bonus shares at 20%.
CaixaBank shareholders have nominated the new board of directors for the post-merger era: José Ignacio Goirigolzarri Tellaeche, Joaquín Ayuso García, Francisco Javier Campo García, Eva Castillo Sanz, Teresa Santero Quintillá and María Costa Duarte Ulrich.
Executive directors will include the current MD, Gonzalo Gortázar Rotaeche, Tomás Muniesa Arantegui (deputy chairman), José Serna Masiá, María Verónica Fisas Vergés, Cristina Garmendia Mendizábal, María Amparo Moraleda Martínez, Eduardo Javier Sanchiz Irazu, John Shepard-Reed, and Koro Usarraga Unsain.
CaixaBank was originally set up in Catalunya 115 years ago, and has been known as Caixa Catalunya and La Caixa until it took on its current name recently.
TWO of Spain's largest high-street banks are reported to be in merger talks, potentially resulting in the joint entity being the second-biggest in the country in terms of share capital.
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