More expensive loans, higher commissions and lower remuneration on deposits. These are three of the most damaging consequences for clients in Catalonia due to a possible merger between BBVA and Banc Sabadell, according to a report published today by the Catalan Competition Authority (ACCO), dependent on the Department of Economy.
In that text, the institution warns that a BBVA-Sabadell merger “could cause an increase in the cost of debt for companies and families in Catalonia.” The work highlights that “increased concentration, which reduces competitive pressures among credit institutions, could also mean, among others, lower remuneration on deposits and an increase in commissions applied to clients.”
In the report, the Catalan Competition Authority calculates that after a hypothetical merger, 85% of the credits in Catalonia would be in the hands of just three financial entities.
According to the report “if the acquisition or takeover of Banc Sabadell by BBVA occurs without certain
“adequate commitments, would imply a notable increase in the degree of concentration existing in the banking sector in Catalonia, which, on the other hand, is already high.” The ACCO believes that digital banking and entities from other countries can exert some competitive pressure but “it seems limited.” The biggest competition problems – according to the institution – would occur in the contracting of the “products and services of greatest importance to them” which is when “they seem to opt for traditional State banking.”
The report is not binding on the operation, but it is the first from a competition authority that indicates the effects that may arise from the operation.