BBVA presents unprecedented measures to Spanish regulator CNMC in order to guarantee financial inclusion, lending to SMEs and competitiveness
BBVA has submitted to the Spanish National Markets and Competition authority (CNMC) a series of unprecedented measures to guarantee financial inclusion, lending to SMEs and competitiveness, especially in Catalonia and the Valencian Community, in order to facilitate a prompt authorization for the combination with Banco Sabadell. The specific commitments being presented include: BBVA will not close offices where there is no other branch nearby and will maintain the commercial terms for individuals and SMEs in those postal codes in which there are fewer than four financial institutions¹. In addition, the bank is committed to maintaining, for 18 months, the working capital lines for all SMEs, and the current total credit volume for those that work exclusively with the two banks². These commitments largely mitigate the risks identified by the CNMC, which are mostly focused on certain territories. The bank will continue to collaborate closely with the authority to finalize the commitment agreement and the authorization of the transaction as soon as possible.
¹For the purpose of competition, BBVA and Banco Sabadell are considered as a single entity.
²Except in case of financial deterioration.
“The commitments being presented exceed those agreed upon in previous operations in the Spanish financial sector, some even significantly. These are unprecedented measures to boost lending to SMEs, a key segment where we want to continue growing, and ensure access to banking services in all territories,” said BBVA CEO Onur Genç.
The Spanish competition regulator (CNMC), in its analysis of the transaction of BBVA and Banco Sabadell, decided to move to the second phase of review, consulting with market participants to assess the effectiveness of the commitments submitted to mitigate risks related to SMEs and to clarify BBVA's commitments in the merchant acquiring market. According to the CNMC, “In the first phase of the procedure, a detailed investigation was conducted on the competitive situation in the affected markets. This will allow for a more efficient analysis in the second phase, which aims to further scrutinize the transaction.”
The CNMC has thus identified certain very specific risks that BBVA is addressing in the commitments being presented. The following commitments have a duration of three years, except where otherwise noted.
In order to guarantee financial inclusion, BBVA is committed to:
- Not closing branches where there is no other nearby branch (of BBVA or Banco Sabadell) within a radius of at least 300 meters.
- Not closing offices in those postal codes with a per capita income of less than €10,000.
- Not leaving behind any municipality (neither substituting via an agent, mobile bank or other means) in which there are fewer than three competitors. Customers in these municipalities will be offered the Correos Cash service twice a month, at no cost.
- Maintaining teller services with the same business hours as Banco Sabadell’s offices in those municipalities.
- Creating an account for vulnerable customers, with no opening, administration and maintenance fees, a free debit card and free and unlimited domestic transfers through digital channels, among other conditions.
BBVA has presented the following commitments in order to maintain the commercial terms and conditions for individuals and SMEs:
- Maintaining the commercial terms and conditions in the postal codes where there would be fewer than four financial institutions.
- Furthermore, for SMEs in these postal codes the pricing of new loans will not exceed the average price applied at national level.
- Not closing the offices of Banco Sabadell specializing in businesses in all of Spain.
With the aim of ensuring lending for SMEs in the whole of Spain, BBVA is committed to³:
- Guaranteeing the continuity of all working capital lines (loans with a termination or renewal period equal or less than 1 year) that Banco Sabadell had in place in Spain, for 18 months.
- Maintaining, for 18 months, all credit volume for SMEs that do not have a financial provider other than BBVA or Banco Sabadell.
Regarding access to ATMs, BBVA is committed to:
- Maintaining access to Banco Sabadell’s ATMs for all the customers of the entities belonging to the Euro 6000 network for a period of 18 months, or in this case, until the merger of both banks (in case that BBVA ends the existing agreement between Banco Sabadell and the banks from the Euro 6000 network)
Likewise, BBVA has proposed, in line with previous transactions, the divestments of excess stakes in payment companies.
The bank will continue to collaborate closely with the authority to finalize the commitment agreement and the authorization of the transaction as soon as possible.