Not having learned a thing from merged banks that then collapsed.
Spain’s banking sector is about to be hit by a new wave of mergers and acquisitions, according to US rating agency Standard & Poor’s. The new phase of industry consolidation will begin with the stealth merger of largely state-owned Bankia with wholly state-owned Banco Mare Nostrum (BMN).
The two banks, each the product of two madcap mergers of Spain’s most insolvent savings banks, will be merged into one entity that is expected to become Spain’s fourth biggest bank by assets. The merger is more or less a done deal, for the simple reason that besides Bankia, BMN has no other suitors and its IPO last year was a complete dud. No private sector player seems willing to even touch its assets with a barge pole, let alone buy them at a “discount”.
Two renowned Spanish economists, Daniel Lacalle and Javier Santacruz Cano, have already expressed serious reservations about the proposed operation. Most importantly, there are no synergies to be had, they argue, since Bankia already enjoys a strong presence in virtually all the regions where BMN is present.
“This type of operation between banks normally creates no value,” says Lacalle…
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