Madrid The cost savings arising from domestic solidarity in the Spanish banking sector should be the driver for more possible deals, bank officials said at a financial event in Madrid on Wednesday.
Faced with extremely low interest rates and the effects of the Covid-1 pandemic epidemic, European banks are under increasing pressure to reduce spending on their own or through bonds.
Manuel Menendez, chief executive of Unicazar, told the forum: “When such agreements are made properly, they make a lot of money and help make the business more profitable and sustainable.”
Spain now has 10 banks, down from 55 before the 200-year financial crisis, most recent deals such as the acquisition of Caixabank and the Unicazar deal to buy Liberbank. Contracts have the promise of cost savings.
“Personally, I think there will be more (mergers), I don’t know when or who and I don’t think it will be tomorrow,” said Gonzalo Gortazar, CEO of Kaixbank.
“Supervisors are clearly publicly advocating to follow this path,” Gortazar said, citing the bank’s low profitability as one of the structural weaknesses in the sector.
But he said saving costs through border transactions in Europe would be more complicated.
In July, Kaixbank increased its annual cost savings from 770 million euros to 940 million euros ($ 1.1 billion) from the Bankia deal. This agreement made Spain the largest domestic donor.
As part of the agreement with Liberbank, Spain’s fifth-largest donor, Unicaja said it would save million 1.02 million in total costs by 202 by.
Unicazar Menendez said on Wednesday that the bank would provide those savings, adding that “there are reversals for additional adjustments that should be seen sooner rather than later.”
Kaixbank has announced that it will cut about 6,450 jobs to save on its costs. Unicaja has not yet given details about its restructuring plan.
(1 = 1.1714 euros)
By Jesus Aguado and Emma Pinedo
This News Originally From – The Epoch Times