Spanish banks Sabadell and BBVA scrap merger plan
Spain’s second-largest bank BBVA and smaller rival Banco Sabadell said Friday they had scrapped plans for a possible tie-up that could create the country’s largest lender.
Sabadell said in a statement that it had “decided to terminate these discussions” as the two parties had failed to come up with a share exchange agreement.
Banks across Europe are struggling to cope with record-low interest rates and the economic downturn sparked by the coronavirus pandemic, which has raised pressure on them to boost liquidity by selling assets or through tie-ups.
BBVA posted a net loss of 15 million euros ($12.7 million) for the first nine months of 2020 while Banco Sabadell, Spain’s fifth-largest bank, saw net profit fall during the period by 74 percent to 203 million euros as it increased provisions for bad loans.
Founded in 1857, BBVA employs more than 100,000 people in about 30 countries.
It has a strong presence outside of Spain in former Spanish colonies in Latin America as well as in Turkey.