The logo of Caixabank seen outside a branch in Madrid, Spain September 16, 2020. — Reuters pic
Under terms of the deal, shareholders in CaixaBank, Spain's largest domestic bank, would hold 75 per cent of the new entity, while Bankia shareholders would take the remaining 25 percent. The huge merger comes in a very difficult economic context for Spain which has been particularly badly hit by the coronavirus pandemic, with gross domestic product collapsing by 18.5 per cent in the second quarter.
Press reports suggested the takeover would result in nearly 8,000 jobs being axed. The two banks currently employ 51,000 staff spread across 6,000 branches. Since the Bankia bailout, the government has been trying to offload its 61.8 stake in the bank but economic context has never been right. For now, it has only managed to recover €3.3 billion of the €22 billion payout.