BBVA bank looks to merge with rival bank Sabadell

The Spanish bank BBVA, based in the Basque country, confirmed on Friday to the Spanish stock market regulator (CNMV) that it is studying a possible merger with the Catalan bank Banc Sabadell.

BBVA said it had appointed advisors to study the operation and had informed Banc Sabadell's board of directors of its interest in "initiating talks to explore a possible merger between the two entities."

Shortly thereafter, the Catalan bank confirmed to the CNMV that it had received a "written indicative proposal" from BBVA to endorse a merger. 

At midday, BBVA shares were down 7.5% and Banc Sabadell shares were up 6.8%.

Banc Sabadell was founded in the Catalan city of Sabadell in 1881, but moved its headquarters outside Catalonia during the  2017 independence push, reportedly under pressure from Spain's conservative government of the time.

Failed merger talks in 2020

In 2020, the two financial institutions already explored a merger, but the talks failed after two weeks of negotiations. 

Banc Sabadell's management board decided to reject a deal after "a disagreement over a potential exchange ratio of both firm's shares."

If the merger becomes a reality, it would make the bank the second-largest lender in Spain.

BBVA posts record Q1 profit

The news comes a few days after both banks announced their profits.

During the first quarter of 2024, BBVA made a profit of €2.2 billion, 19% more than the same period last year.

Banc Sabadell's profits reached 50%, earning €308 million in the first quarter of 2024.

On the stock market, BBVA has a capitalization of more than €60 billion, while Banc Sabadell exceeds €10 billion.