On June 9, 10 years ago, Spain gave its arm to twist. In the run-up to the summer of 2012, the government of Mariano Rajoy finally agreed to the European siren songs. The hole in the financial system was unstoppable and the mergers that were sponsored since the beginning of the Great Recession did not stop the bleeding. The Executive needed to provide a public injection that it could not assume and requested the rescue from the community partners through a liquidity line worth up to 100,000 million. And with it, he committed himself to a list of counterparts in the form of cuts and reforms: pensions were frozen, unemployment benefits were cut, the health and education workforce was adjusted and tax increases were approved. All to allow a drastic change in the Spanish banking map that would make it more sustainable. Result? The big fish ate others who were not exactly small. For example, CaixaBank gobbled up Bankia —a giant with feet of clay— or Santander al Popular.
The number of entities —if banks and savings banks are added— has gone from 55 to just a dozen in just over a decade. Some movements that began with the 2008 crisis and that were ultimately the seed of the financial rescue after a series of failed solutions. A reflection of the concentration process are the big three in the sector (Santander, BBVA and CaixaBank), which bring together under their umbrella 29 entities that operated individually before the Great Recession. A turnaround in the Spanish financial map and a drastic change for clients who saw in many cases how the bank they worked with has changed its name on several occasions. In this financial supermarket not only did the big ones buy, entities of all sizes participated. As an example, the most recent operation: the merger of Unicaja and Liberbank, from which there are still some conflicts on account of the distribution of power in the Andalusian bank.
The bailout has been hailed as a success over the years. Not because the State’s red numbers have grown little (Spain accumulates a public deficit of 73,138 million euros attributable to public interventions in favor of the financial sector, according to Eurostat data), but because a greater evil was avoided that put at risk including the economic viability of the country. Following the request, the Government received a loan of 41,333 million euros from the European Stability Mechanism (ESM): a first installment of 39,470 million euros in December 2012, an item that was used for the most part to recapitalize BFA-Bankia, Catalunya-Caixa , NCG Banco and Banco de Valencia, as well as for an injection of 2,500 million in Sareb, the so-called bad bank, created to park the most toxic assets of the rescued bank. In February of the following year, the MEDE released another 1,860 million euros for the recapitalization of Banco Maren Nostrum, Banco Ceiss, Caja 3 and Liberbank.
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During this time, the great loss has occurred in the fabric of savings banks, which has reduced their social work. Present throughout the country, they were the backbone and gave access to financing to citizens and small businesses in any corner of the country. However, lousy governance riddled with errors and a lack of financial muscle carried most of them away. The first notice was Caja Castilla-La Mancha in March 2009. Then Cajasur and Caja de Ahorros del Mediterráneo. The third notice, as in bullfighting slang, would be final. The mergers did not serve as a firewall, despite the fact that there were so many that it is difficult to follow the trail since then: Bankia was born after the merger of eight savings banks (as seen in the first graph). Caja Murcia would later join and take over Caja Granada and Sa Nostra, which had created Mare Nostrum (BMN). And all of these ended up gobbled up in turn by CaixaBank, which previously assimilated seven other entities on its own. BBVA absorbed another six boxes. And Santander stayed with Popular and Pastor.
Although it may seem so, not all movements have been in favor of large groups. Medium and small banks also widened their circle of action by gobbling up the competition, which allowed them to grow in territories where they were not present. For example, Kutxabank now includes Caja Vital, BBK and Cajasur. Or Ibercaja, which added three other boxes. These are just some of the movements in a sector that has been reduced in size by forced marches in record time thanks to a bailout that ended up being paid by the taxpayer.