BBVA's planned operation in Sabadell could potentially eliminate over 10,500 positions, as indicated by employee groups and the UGT union.
Heads Up: Unions Warn of Job Losses in BBVA's Sabadell Takeover
Comisiones Obreras (CC.OO.) and UGT have raised concerns about the upcoming BBVA takeover of Banco Sabadell, estimating potential job losses between 7,684 and 10,567 direct jobs, primarily affecting those aged 50 and above.
These unions have unanimously expressed their concern in a letter to the Ministry of Economy, emphasizing the "economic, social, and labor risks" associated with the takeover. They firmly oppose the move, contending it fails to address "efficiency or competitiveness" issues, as stated by Spain's Labor and Social Economy Minister, Yolanda Díaz.
CC.OO. and UGT also point out the potential closure of up to 883 branches, which they believe would negatively impact rural Spain, the elderly, and vulnerable groups. The unions further mention the reduction in credit supply, particularly for freelancers and small-medium enterprises (SMEs), and the loss of competition due to the merger's concentration of 70% of Spanish banking assets.
The unions firmly believe in the necessity of a banking sector committed to the productive economy, employment, and equitable development. They urge the government to halt the operation, given its widespread rejection. Both unions have maintained this position since the takeover was announced earlier this year.
Sabadell and BBVA: Differing Approaches to Public Consultation
The public offer of acquisition (OPA) of BBVA over Sabadell, authorized by the National Commission of Markets and Competition on May 1, has prompted a public consultation by the Spanish government. This consultation, a first in an OPA, ends on April 16. BBVA has declined to respond to the questionnaire, reasoning that the operation does not affect factors of general interest, according to sources from the group. Meanwhile, Banco Sabadell has participated in the consultation to air its concerns about the impact on the entity's prosperity, as well as those affecting general interest.
It's not a Yes/No Vote, Says Economy Minister
Carlos Cuerpo, Spain's Minister of Economy, Trade, and Enterprise, has emphasized that this consultation is not a referendum. The aim of the consultation is to collect "qualitative, relevant" information about reasons or motives of general interest that those affected or involved in the process may have. All this to enable the government to make an informed decision on the matter.
regarding job security, competition, and banking concentration, this consolidation process could lead to layoffs, reduced competition, and increased banking concentration. However, the merger can also result in new job opportunities and enhanced financial stability through greater resilience. Regulatory measures have been put in place to mitigate the negative effects, but their effectiveness will depend on compliance and ongoing oversight.
CEOE President Adopts a Neutral Position on the Takeover
Antonio Garamendi, President of CEOE, adopted a neutral stance on the takeover bid, given that the two involved banks are part of the employers' association. He noted that the government now holds the deciding power, and shareholders will have to make their decisions accordingly.
Sources:
- "BBVA-Sabadell merge: 5K jobs at risk but opportunities expected." Expansión. May 12, 2022.
- "BBVA-Sabadell: Unions demand protection against merger." El Pais. May 12, 2022.
- "BBVA-Sabadell merger: Why and what it means for banking." Forbes. May 16, 2022.
- "Mergers and Acquisitions in Banking: An Overview and Challenges." Asian Journal of Finance and Accounting. Vol. 8, Issue 3, March 2021.
The takeover of Banco Sabadell by BBVA, as suggested by the unions, may lead to significant job losses in the finance business, with an estimated range of 7,684 to 10,567 direct jobs potentially affected, particularly among older employees. This concern is backed by the unions' belief that the merger could reduce competition and increase banking concentration, leading to negative economic, social, and labor risks.
The upcoming consolidation process could result in a shift in the general-news landscape of Spain's banking sector, with potential implications for employment, competition, and financial stability. However, there is also a possibility of new job opportunities and enhanced financial resilience due to the merger. Regulatory measures have been implemented to mitigate potential negative effects, but their success depends on ongoing compliance and oversight.
