Merger of Bankia and Caixabank: a bang in Spain

D.he planned merger of Bankia and Caixabank in Spain is like a bang. Due to the size, the intentions are particularly heard.

In fact, the merger is only one of many mergers in the European banking sector. In Germany alone, dozens of institutes have joined forces in the German savings bank and cooperative sector.

Consolidation is in full swing. Low interest rates, digitization, the search for new business models, rising costs for regulation, the list of building sites for banks was long even before Corona.

With the virus crisis and the economic recession that followed, the risk of loan defaults increases. The announcement in Spain created a good mood among investors on the stock exchange. Commerzbank, Deutsche Bank, Unicredit, BNP Paribas – all share prices are well up.

Are these the happy harbingers of a major cross-border merger in the European banking market? No.

The years of weak earnings weigh heavily on the banks, and Corona comes on top of that. The top German bank supervisor Felix Hufeld predicted just a few days ago: “The big end is still to come.”

Who wanted to take care of a major merger? Nobody.

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