Spain’s competition watchdog, the CNMC, on Tuesday, March 23, approved Caixabank’s acquisition of state-owned lender Bankia, though the merged entity will have to agree to a number of conditions in its retail banking arm.
Caixabank agreed to buy Bankia in September for €4.3 billion (US$5.2 billion) to create Spain’s biggest domestic bank with more than €650 billion in assets.
The new entity will not have to divest any of its businesses, the CNMC stated.
However, it also stated that an analysis of the combined company’s retail banking business found there would be a lack of competition in 86 postal codes across Spain, and Caixabank would command an effective monopoly in 21 of them.
Among other concessions, Caixabank must guarantee the same terms and conditions to existing Bankia customers in those areas for three years.
To mitigate any risk of financial exclusion it also cannot close offices without the CNMC’s authorisation in any area where it is the only lender.
There we no concerns in other business areas such as investment or corporate banking, the CNMC stated.
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