Few bankers would have envied José Ignacio Goirigolzarri when in 2012 he was called in to rescue Bankia, a debt- and corruption-ridden Spanish lender teetering on the brink of collapse. The bank was caught up in a maelstrom of fraud and mismanagement. Its former chairman and ex-managing director of the International Monetary Fund, Rodrigo Rato, was forced to resign and was later imprisoned for misappropriation of funds. Bankia’s €38bn property portfolio, at the height of the real estate meltdown, ranked largest among Spanish banks. The government had to step in with a €22.4bn rescue plan that entailed taking a 68.4% holding in the troubled bank. Bankia was in urgent need of a restructuring plan.
Mr Goirigolzarri brought to the job his many years of experience in strategic planning. The 67-year-old native of the Basque country began his career in Banco de Bilbao’s strategic planning department in 1977. He oversaw the merger with Banco de Vizcaya and later Argentaria, forming the present-day BBVA. In April 2001 he became the group’s global head of retail banking and, eight months later, he was appointed chief executive.
“When I left BBVA in 2009, I was not keen to take on another executive role in banking,” he says. “I had been jetting across the Atlantic as many as 60 times a year to look after our Latin American business. I had been at BBVA in one role or another for more than 30 years and my aim was to devote my time to other interests.”
Making a comeback
He returned to his philosophy studies and offering guidance to entrepreneurs, mostly in Latin America, through his foundation, Garum Fundatio. “Three years later, I was asked to take over the helm at Bankia, and I agreed for one fundamental reason,” he says. “The bank, as well as the Spanish economy, was in a difficult situation and I could not turn down an opportunity to offer my services to society. This became the biggest challenge of my professional career.”
Mr Goirigolzarri assembled a small team of prominent bankers who worked in accordance with strict guidelines of corporate governance. “We took a realistic approach to capital requirements and began to roll out ideas for the bank’s rapid capitalisation — all of which took shape as the three-year strategic plan,” he says. “We worked on this plan with a maximum level of transparency and efficiency. It was a tough undertaking because we needed to cut a third of our branch network and reduce the workforce from 20,500 to 14,500 employees. Moreover, we had to explain these steps to society and — above all — to our staff.”
[It has been] the biggest challenge of my professional career.
The first task was to approach the problem with realism and secondly to take on board the need for corporate transparency. “There were three stages in taking Bankia forward: the first was between 2012 and 2015, when we implemented our strategic plan to restructure the entity,” says Mr Goirigolzarri.
“The second one began in 2016, when we gave new life to the business and improved the bank’s level of customer service. The growth stage began in 2017, when we took a major step forward by merging with Banco Mare Nostrum to create the fourth-largest financial institution in the Spanish market, with managed assets of €223bn. By the end of 2020, Bankia was able to report the best solvency ratio of the largest Spanish banks,” he says.
Cultural transformation
“We soon realised the need to develop our digital business and initiate a cultural transformation of the bank,” he recalls. In September 2020, a merger was announced that would create Spain’s largest bank by retail market share. Bankia agreed to join CaixaBank to form a group with combined assets of more than €664bn. The newly-created lender, which retains the CaixaBank brand, appointed Mr Goirigolzarri its new chairman. Following the deal with CaixaBank, the government’s holding is now 16% of the new group. The remaining stake should be sold off by the end of 2023.
Mr Goirigolzarri cites two basic reasons for the merger with CaixaBank. Spanish and European banks in general had been suffering the impact of negative interest rates since the first quarter of 2016. Bankia, as well as the other entities, also needed to invest heavily in digitisation and that, coupled with the coronavirus blow and Spain’s sharp economic downturn, led to the decision to seek a partner.
“The merger with CaixaBank provided the critical mass we were seeking,” he says. “The new group has a strong balance sheet and its business franchise provides a diversity of income streams. We could add to this a similar customer base and shared cultural background, as both banks were the product of mergers between more than 100 savings banks.”
