BBVA to close 285 branches and lay off 1,700 staff in Catalonia, after Catalunya Banc acquisition
BBVA CEO, Angel Cano, announced on Wednesday a 3-year plan to restructure the bank's presence in Catalonia after the integration of the previously nationally-owned Catalunya Banc, which was purchased last July. The bank's 'number 2' explained they will shut down 285 branches of their network in Catalonia and lay off 1,700 employees, which is 20% of the local workforce including Catalunya Banc's staff. At the end of 2014, BBVA had 639 branches of its own in Catalonia and was working on integrating the 728 branches from the recently-purchased entity. According to the new plan, 150 branches from Catalunya Banc will be closed. According to Cano, the acquisition of the Catalan bank will start bringing positive figures to the Group’s results by 2016. Furthermore, it is strategic, since the bank will roughly double its presence in Catalonia and will add 1.5 million clients, becoming Catalonia’s second-largest financial entity.
Barcelona (ACN).- BBVA CEO, Angel Cano, announced on Wednesday a 3-year plan to restructure the bank's presence in Catalonia after the integration of the previously nationally-owned Catalunya Banc, which was purchased last July. The bank's 'number 2' explained they will shut down 285 branches of their network in Catalonia and lay off 1,700 employees, which is 20% of the local workforce including Catalunya Banc's staff. At the end of 2014, BBVA had 639 branches of its own in Catalonia and was working on integrating the 728 branches from the recently-purchased entity. According to the new plan, 150 branches from Catalunya Banc will be closed. According to Cano, the acquisition of the Catalan bank will start bringing positive figures to the group’s results by 2016 and, by 2018, it should generate some €300 million of BBVA's total annual profits. Furthermore, it is strategic, since the bank will roughly double its presence in Catalonia and will add 1.5 million clients, becoming Catalonia’s second-largest financial entity.
In April 2014, it was announced that BBVA would finally be buying Catalunya Banc, beating the offers of Santander and Barcelona-based CaixaBank. BBVA paid €1.165 billion to the Orderly Bank Restructuring Fund (known as FROB), which is managed and owned by the Bank of Spain and the Spanish Government. Catalunya Banc had received some €12 billion of public money so far. The purchase was effective from July and since then the BBVA has been working to integrate what used to be Catalonia's second-largest savings bank.
Before the acquisition, Catalunya Banc was publically managed for almost three years and had undergone two failed attempts at selling the entity in 2013. Resulting from the merger in 2010 of three historical Catalan savings banks (Caixa Catalunya, Caixa Tarragona and Caixa Manresa), it was converted into a private bank owned by CatalunyaCaixa in July 2011.
Catalunya Banc is BBVA’s second acquisition in Spain, and in Catalonia in particular, arising from the restructuring process of the financial system. The first purchase was Unnim Banc in 2012, the result of the merger in 2010 of three other Catalan savings banks: Caixa Sabadell, Caixa Terrassa and Caixa Manlleu. With these two important acquisitions, BBVA has roughly quadrupled its presence in Catalonia in a few years.
Increasing its presence in Catalonia by integrating Catalunya Banc's network
BBVA has 4,391 workers in Catalonia, while CatalunyaCaixa has 4,386. On 31 December 2014, there were 639 BBVA branches in this Autonomous Community and 728 Catalunya Banc branches. The reduction of the workforce announced by Cano on Wednesday will affect 20% of the total workforce of both entities combined, which overall amounts to 8,777 employees.
BBVA CEO, Angel Cano explained that the opportunity to keep the brand CatalunyaCaixa or unify all the branches under that of BBVA is still under consideration. The multinational group is present in 31 countries, providing financial services to 51 million customers.
Cano highlighted that so far when restructuring processes were put in place, no relevant problems occurred. BBVA has assured that the reduction of the workforce will be mainly carried out on a voluntarily basis and favour early retirement.
The bank's CEO made these remarks while presenting the first quarter results for 2015, when BBVA posted a net attributable profit of €1.54 billion, up 146.2% on the previous year. Without including the capital gains from the sales of shares in Chinese bank CNCB, profit increased 52.8% to €953 million.
According to the BBVA press release, following the acquisition of Catalunya Banc, BBVA has become Spain’s leading financial institution, adding 1.5 million clients. However, this purchase had no effect on the results of this first 2015 quarter.
“These results confirm the positive growth trend we have seen since the end of last year”, said Ángel Cano. “The quality of our earnings, improved risk indicators, a solid capital position and the progress made in the digital transformation are the quarter’s key drivers”, he highlighted.