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BANKING

Spain’s BBVA advances in Sabadell takeover as ECB stands aside

The hostile bid by Spain's second-largest bank BBVA to take over its smaller rival Banco Sabadell took a step forward Thursday when the ECB declined to block a merger.

Published: 6 September 2024 11:18 CEST
bbva sabadell
BBVA now looks more set than ever to take over Sabadell. Photo: Dani Pozo, Josep Lago/AFP

BBVA said in a statement released by the stock market regulator that the it had “received the decision of non-opposition from the European Central Bank to BBVA’s taking control of Banco Sabadell, as a result of the offer.”

BBVA announced the hostile bid in May, which immediately ran into opposition from Spain’s leftist government on worries about job losses and increased concentration in the banking sector.

A takeover would create a banking powerhouse capable of competing with Santander — Spain’s leading bank — as well as with European giants such as HSBC and BNP Paribas.

READ MORE: How would the BBVA takeover of Sabadell affect customers in Spain?

Sabadell, Spain’s fourth-largest banking group in terms of capitalisation, rejected a friendly offer from BBVA, saying it “significantly undervalues” the bank.

BBVA’s hostile public offer was announced under the same conditions as the initial approach — an exchange of one new BBVA share for every 4.83 Sabadell shares.

BBVA recently approved a capital increase, another key element for the tender for Sabadell shares to go forward.

The ECB’s green light was also a key requirement for the public share offer to go forward.

It will also need the approval of Spain’s stock market regulator, the CNMV, as well as competition authorities in the countries in which the banks operate.

The regulatory hurdles could take several months to clear.

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MONEY

‘Fewer Lamborghinis’: Spain’s PM aims to tax the super-rich more 

Spanish Prime Minister Pedro Sánchez has announced that his government is planning higher taxes for those "with enough money to live 100 lives", which could mean a higher income tax than the current maximum of 47 percent.

Published: 5 September 2024 12:05 CEST
'Fewer Lamborghinis': Spain's PM aims to tax the super-rich more 

Sánchez kicked off the political year on Wednesday September 4th with a press conference in which he announced “new measures aimed at limiting the disproportionate privileges that certain elites in the country have and benefit from.”

“We are going to tax those who already have enough money in the bank to live a hundred lives,” Sánchez told journalists at the Cervantes Institute.

“We will do this, I repeat, not to harm millionaires, but to protect the middle and working classes from a system that continues to be extraordinarily unfair,” the PSOE leader said.

For Sánchez, “regardless of what some people think, Spain will be a better country if it has more electric cars, made in Spain, more public buses and, therefore, more public transport and fewer Lamborghinis.”

According to the Spanish PM, a more progressive tax system will be one of the three main axes that the left-wing coalition government will develop in economic matters in this new political year, with taxes “that will increase more for those who have more.”

The highest income tax (IRPF) bracket is currently 47 percent, for those earning above €300,000 a year. People earning between €60,000 and €299,999 have an income tax rate of 45 percent.

The Socialist-led government also introduced the so-called ‘millionaire’ or ‘solidarity’ tax in 2022, a levy on people worth more than €3 million (it’s not a tax on income but rather on assets and holdings). There is also a wealth tax which varies based on the region and the residency status.

READ ALSO: How wealthy people in Spain are avoiding the millionaire tax

Sánchez has not yet specified how much income is ‘enough to live a hundred lives’, nor if the planned measures will include higher-income earners than aren’t millionaires but have above average salaries. 

In Spain, there are 5 million people who earn above €3,673 gross a month, a figure from the French Observatory of Inequalities (relating to Spain) and cited in Forbes as being the threshold for being classified as ‘rich’ in Spain.

When Spain’s Economy Minister Carlos Cuerpo was asked on Onda Cero radio station to disclose more about what the Spanish premier was planning, he hinted the main focus will be the super-rich. 

For political opponent and far-right Vox leader Santiago Abascal, Sánchez’s aim is “destroying the middle classes” rather than having anything against “Lamborghinis” and the wealthy.

Similarly, the country’s right-wing media has been critical with the PM’s announcement, claiming that he wants to “kick the rich out of Spain” or distract from increasing poverty in the country.

People with incomes above €600,000 a year represent only 0.07 percent of the population in Spain, contributing around 7.57 percent of taxes to public coffers.

On the other hand, the middle classes – those with an income between €30,000 and €60,000 – make up around 21 percent of the population and their taxes add up to 36.8 percent of the total. 

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