What are the consequences?
Periodically, mergers between banking entities take on great prominence in our news.
Above all, in times of economic difficulties, this type of operation is accentuated, creating large banking groups.
Now, what are the consequences of this type of union?
What is and why a merger of banking entities occurs
For legal purposes, the bank merger It consists of the integration of two or more entities into one, integrating all the assets and liabilities of both entities into the new one.
What kind of mergers exist?
full fusion:
The merged banking entities dissolve and transfer all their assets and liabilities to the created entity.
cold fusion:
The entities share a board of directors and a common central structure, but each of them retains its autonomy. It is a partial merger and is usually the step prior to the total merger.
Merger by assignment of assets:
In this modality, the entities continue to function in the same way, they do not lose their legal personality or their operations, but they transfer part of their assets to a new entity to operate through it. This merger is widely used to remove unwanted assets from the balance sheet.
What are these due to? new bank mergers?
What are their causes?
The bank seeks higher profitability in the rise in interest rates. However, these are very low, so they need to find other sources of income.
To this end, they increase their commissions, market insurance, propose specific financing for vehicles, etc.
But this is often not enough. The new bank mergers respond to the need to adopt strategies to reduce costs. Only then can they be more profitable.
In all examples of financial mergers Spanish you can observe this reality. In fact, banks benefit in different ways:
- – Optimize their office networks and physical branches, gaining presence in certain territories and cities.
- – They increase the number of clients as its market share. By adding their client portfolios, they obtain a higher critical mass.
- -Improve and diversify their products. The new bank mergers make it possible to offer broader and more specific portfolios of services.
- -Optimize the efficiency of central services. The merger of strategic departments allows significant savings.
- – They promote their solvency ratios. Thanks to the merger, the parties involved improve their results in ECB stress tests.
- – Increase your technological potential. Access to technological/digital resources is greater the larger the organization. In addition, synergies in innovation and costs are achieved.
- – Add the related entities. The union of forces and the accumulation of related organizations raise the power of the new company.
Common consequences of bank mergers
In general, among the advantages of bank mergers Globally, we highlight the following:
- – It is easier to raise capital.
- – There is more capacity to obtain financing in the interbank system.
- – Improve services.
Although having macro banks may seem a priori to favor the market, studies show that these conglomeration processes facilitate the imposition of abusive actions and the (formation of oligopolies) -markets dominated by few companies-.
Fortunately, alternative financing is emerging to offset these consequences of the bank merger and facilitate the financing of SMEs and the self-employed.
How new bank mergers affect customers
Among the latests Moravia's compositions consecuencias Among the main of these unions, we can highlight the following:
- – It produces a IBAN change in the entity that has been integrated by the other.
- - Generally, cards, accounts and mortgages are not modified. However, sometimes new trade policies are established.
- - In the fixed-term contracts (a loan or a fixed-term deposit), the agreed conditions are not unilaterally modifiable. Therefore, they will have to reach an agreement with you to do so (unless they are changes contemplated in the signed contract).
- - In the indefinite duration contracts (current account, bank card, savings account...) Yes, changes can occur, although they will have to inform you of them with two months' notice.
Additionally, there are other modifications that could affect you.
For example, having a different manager than the one who attended you before or the appearance of new products.
Therefore, you have to take the initiative and find out as soon as possible.
The key, in any case, is to know very well the circumstances that affect you. Read thoroughly, and slowly, the information that comes to you.
Meet with the new managers of your customer account and do not hesitate to ask the necessary questions.
If you have doubts, go to professionals.
And remember, in any case, that the alternative financing is foreign to these entities.
Therefore, it is never affected by the merger of the banks.
If you are harmed by these mergers, do not hesitate to contact WORK CAPITAL,
we will be happy to help youboth in el promissory note discount and the invoice advance, as with any other financial matter you need!
Call us and we will inform you without obligation!
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