Consumer watchdog Facua has warned of a potential negative impact of a Bankia-Caixabank merger on customers. The eventual reduction in the number of branches could reduce the quality of service, but the shareholders would benefit, says the group.
The purchase-merger of Bankia by CaixaBank has already prompted first alarm bells about the effects of a financial operation of this magnitude. The consumer association Facua has warned of the detrimental effects that a Bankia CaixaBank merger could mean for consumers, which could result in the closure of branches, higher commissions and worse service to users. Facua has issued a summary of points of concern, with most planned action points intending to strengthen the group for the future and benefit the thousands of small shareholders who have already seen share prices soar.
Facua spokesperson Rubén Sánchez has described everything that has happened with Bankia so far as a “joke”. He says that 8 years later the vast majority of the more than 20,000 million euros injected into Bankia has not been recovered and added that this possible merger means “saying goodbye” to a public bank.
After the operation – which if it goes ahead, will create the largest bank in Spain – Facua believes that there are many uncertainties for consumers and foresees widespread closure of offices, which would harm employment and damage customer service.
“The move will end up harming consumers due to the loss of bargaining power in this sector and may end up translating into an increase in the commissions paid by consumers and which has been experienced in recent years with the different entities”, Sánchez added.
Meanwhile, professor at the IEB (Institute for Market Studies) Juan Abellán, considers that the operation “makes sense for both parties.” Abellán explained that with Bankia, the State had “an uncomfortable position vis-à-vis the European Central Bank” that was demanding that it reduce the 61% that the entity had. “Now it would be left with 14-15% in the new entity and that would allow it to delay the sale and get rid of that stake.”
For Investing.com experts, the coronavirus crisis has visibly affected the activity of financial institutions and “has opened the season on a possible era of bank mergers.” This situation benefits investors, many of them small shareholders who have their savings in equities.
Consumer defence association Asufin said that the merger between Bankia and CaixaBank is worrying and limits competition. In Asufin’s opinion, these types of operations generate entities that are too large and represent a risk for the consumer.
The association also highlighted that both entities have a high level of litigation due to the commercialization of their mortgages and other financial products with clauses that have been declared void in the courts.