The other eight mergers are already effective

This was the end of the year race. Forty Spanish savings banks involved in a process of merger had until today to make it effective. These past two weeks, it has not happened a day without the a new milestone is reached for one or other of the mergers. The result is: five new entities which have opted for a "cold fusion" in the form of an institutional protection system (SIP) will be operational in January. The other eight mergers are already effective. This restructuring will restrict the area highly affected by the burst of the bubble real estate 17 "cajas" 45 previously, and this, with State aid of EUR 10.6 billion.

This is just the beginning. "Currently, we spent the juridico-administrative phase of the permissions for the implementation of the SIP and mergers." "In the coming months, you will have achieve de facto restructuring, closing agencies, reducing staff, defining strategies, etc.", says Joaquín Maudos, Professor at the University of Valencia. The SIP of Caja Madrid, called to be the third Spanish financial group, has already announced a plan of departure which lies close to 4,000 employees.

The Bank of Spain press entities for this integration to make more quickly. "Time is money", recently stressed the Deputy Governor of the Central Bank, Javier Aríztegui. "The need for access to markets as soon as the first half of January, the new banking standards and the increase in the risk perception impose a net reduction of the deadlines for the consolidation of projects", assured that who is also President of the bank restructuring fund (FROB).

Savings must also go further. The Bank of Spain recommends that the SIP, which allow entities to pool their means in a Bank while retaining their own identity, exploited to the maximum of their capacities and become de facto fusions. "Send to market the image of a single, consolidated project", pleaded Javier Aríztegui.

The bet of the transparency

New entities access to markets, both to recapitalise to issue debt, will be the test of fire. As investors fret exposure of savings in the construction and real estate. These concentrated credit to the "ladrillo" (brick in Spanish) EUR 603,5 billion, including 364 billion of mortgage loans and 239,5 billion of credit to construction and real estate sectors, according to calculations by Joaquín Maudos. It is 178,5 billion more than the banks and 69 of their total portfolio of credit to the private sector. Here again, the Bank of Spain been transparency, believing that the perception is worse than the reality: early next year, funds but also banks will have to present in detail their exposure to real estate.

Other questions persist, as the weight of the local political powers in the boxes. Thus, 19 of the 21 directors of the Caja Madrid SIP have a political profile. And Joaquín Maudos concludes: "this does not help to improve the image of the sector, as the reform of the funds act has reduced the weight of public administrations from 50 to 40 for the purpose of the depoliticizing".