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Competition authorizes the merger of Bankia with BMN without conditions

The two banks will be able to integrate without the sale of any business, although they plan the departure of more than thousand employees

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Competition authorizes the merger of Bankia with BMN without conditions

The National market and Competition Commission has approved merger of Bankia with Banco Mare Nostrum (BMN), an entity dominated by former Caja Murcia, without any kind of condition. That is to say, y will not have any limitation in ir implementation in terms of office network and main banking businesses. The operation needs approval of European Central Bank (ECB) and administrative process of authorization of Secretary of State for economy. Both documents are expected shortly and without any inconvenience. The news arrives after last Tuesday announced placement of 7% of capital of Bankia that was in hands of state to different foreign institutional investors

Competition has analyzed that although FROB is owner of both banks (has 60.63% of Bankia and 67% of BMN), does not exercise as manager of m. The report understands that Union will be an entity with a quota of less than 15% statewide, although it admits that in some provinces it has a quota of more than 25%. However, in such cases, re is always a competitor with a higher quota or several banks to exercise important competition.

As for data on recovery of public money injected, sale of BMN to Bankia costs for moment to state 1.1 billion, since it valued it in bank bought in 825 million. This meant that state-owned stock package has a value of 536 million and was injected 1.645 billion euros. However, without this merger, public losses could have been higher because BMN had a complicated viability.

A merger with losses for taxpayer

The boards of directors of Bankia and Banco Mare Nostrum (BMN) met on 27 June last and approved merger by BMN Absorption by Bankia. Bankia (nationalized) has valued BMN (which was also nationalized) in 825 million of euros and current shareholders of BMN will receive an action of Bankia for every 7.82 titles of BMN, according to terms of merger agreement of both entities, with what Shareholders of Banco Mare Nostrum will have 6.67% of resulting group.

With this valuation, State receives for its participation in BMN shares of Bankia valued at 536 million euros. It means that it temporarily recovers less than a third of 1.645 billion euros it injected into BMN in February 2013. This entity was formed by merger of Caja Murcia, Caixa Penedès, Sa Nostra and Caja Granada, and of which he was advisor and President of Audit Committee, current Minister of Economy, Luis de Guindos, before his entry into government.

The merged bank will have a 10% approximate share in credits and deposits and 8.8% in branches. However, entity is planning to negotiate a reduction of employees, which trade unions have between a thousand and two thousand workers, although negotiations have not yet begun.  BMN if you have communicated to staff beginning of your restructuring with closing of 24 offices in December, which will be followed more in following months. The closures will focus on Granada, Palma de Mallorca and Murcia, according to five days. These closures will not lead to personnel exit, as y have moved to or branches.

More information
  • BMN predicts problems in medium-sized banking at merger board with Bankia
  • The sale of BMN to Bankia costs for moment to state 1.1 billion
Provinces with high market share

Precisely where it has a higher share new Bankia-BMN is in Balearic Islands, with 21%, where it competes mainly with CaixaBank; In Castellón, with 18%, in front of Jamar; In Granada, with 25%, where Caja Rural de Granada is very implanted, and in Madrid, where it has 15% of credit and 20% of deposits, but also are very present CaixaBank, Santander and BBVA, according to data of competition.

In addition, new bank has a 10% share in corporate banking, 2.7% in investment banking, 4% in insurance and 7% in pension funds.

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