The war of words between savings banks and commercial banks is heating up as the European Commission prepares its study of obstacles to banking consolidation in the EU.
“The cajas [Spanish savings banks] acquire the leftovers of bankrupt banks,” said Juan Ramón Quintás, chairman of the Confederación Española de Cajas de Ahorros (CECA) – the association of Spanish savings banks.
He was responding to a report from the European Banking Federation (FBE) that lambasted the cajas and the German Landesbanken [savings banks].
Mr Quintás also accused Spanish commercial banks of trying to win the battle for customers “in offices rather than in the marketplace”. The cajas account for half the Spanish financial system and have been winning market share.
Ongoing disagreement between the two sides is intensifying as the commercial banks hope to get the European Commission on board with their agenda to dissolve the special status of these institutions.
The commission’s report will include obstacles and possible solutions to cross-border consolidation. “We will try to find the most appropriate measures,” said a spokesperson for the commission.
As part of its submission to the commission, the FBE’s report cited the legal ownership of cajas and Landesbanken as an “artificial barrier” to national and cross-border mergers and acquisitions. The FBE reported that “in Spain commercial banks can be – and often have been – acquired by cajas de ahorros, while the latter cannot be the target of an acquisition undertaken by commercial banks”. The cajas’ legal structure is similar to that of foundations, they have no shareholders and their assets can be acquired, although not their registered name.
The FBE report also stated: “Landesbanken and Sparkassen [by law] must be publicly owned, thus shielding a significant section of the German banking industry from mergers and acquisitions by other non-public sector banks.”
If one of the German states wants to sell its stake in a Landesbank, it has to offer it to the Sparkassen first and if they are not interested in it, the state is free to sell it to any other party.
Hans Obermeier, head of group communications at WestLB, the largest of the Landesbanken, told The Banker: “These restrictions are defined by German law. Any initiative to change that has failed so far.”
