The Key People Who Made CaixaBank’s Takeover of Bankia Happen
CaixaBank SA’s acquisition of Bankia SA will create a new force in Spanish banking and dramatically reduce the state’s ownership in a bailed out lender. Sealing a tie-up that values Bankia at about $4.5 billion involveda cast of both top government figures and leaders of the country’s financial industry.
Here are the main characters who made it happen.
The 78-year-old former chairman of CaixaBank heads the La Caixa Foundation, the entity that owns 40% of the lender and manages its pension plan. He’s effectively the center of power within the bank.
A devout Catholic who goes to mass daily and has a close relationship with Pope Francis, the Catalan native who taught his parents how to read and write rose to the top of the Barcelona-based bank after starting as an errand boy. He’s one of the most influential businessmen in Spain as head of country’s largest industrial group, Criteria Caixa holding, a vehicle for the Caixa Foundation’s assets that has investments in energy and telecommunications, as well as in French utility Suez.
The Spanish economy minister serves as a bridge between the more left-wing elements in the country’s ruling Socialists and the more free-market thinking that’s predominant in the European Union. Some observers say the deal would have been impossible without the former Brussels technocrat in that role as it required deft maneuvers between conflicting political motives.
The Socialists’ minority partner, the far left Unidas Podemos party, has been vocal in its disapproval of the tie-up, preferring to fully nationalize Bankia so it could act as a vehicle to provide cheap loans for small businesses. The fact that a potential deal wasn’t leaked until it was almost fully formed may indicate that Calvino was able to keep Podemos in the dark. Going forward, Calvino will be instrumental in deciding what the government does with its remaining stake in the new entity.
The CaixaBank CEO, who led the negotiations for the bank with input from the Caixa Foundation, will serve as chief executive of the combined company. As the former head of Morgan Stanley’s Financial Institutions Group in Europe, he’s no stranger to mergers and acquisitions.
Gortazar wields executive power in his role, a rarity in a Spanish banking industry where chairmen tend to be the leaders. A question for the new bank will be how it divides authority between him and Jose Ignacio Goirigolzarri who is set to be the new executive chairman. Both have so far managed to avoid clashes of egos and power struggles in their careers.
Jose Ignacio Goirigolzarri
The Bankia chairman negotiated the deal on behalf of the lender and will take over as executive chairman of the new business. That puts one of Spain’s most widely respected bankers on it’s management team.
Goirigolzarri was called on to replace Rodrigo Rato as chairman of the teetering Bankia in 2012. He asked for a state rescue two weeks after taking the job in a move that kicked off a wave of bank funding requests in Spain. He has managed to clean up the bank’s balance sheet and improve an image that had been tarnished by scandal and allegations of wrongdoing in a disastrous initial public offering.
Goiri, as he’s commonly known, is also the government’s representative on the board, where his job is to find ways to privatize the bank and recover some of the 22 billion euros $26 billion) of taxpayer money spent on the bailout. By diluting the government stake and creating a potentially more robust and valuable new bank, he will have partially completed his mandate.
Luis de Guindos
Spain’s economy minister during the last financial crisis was the architect of Bankia’s rescue, so the dilution of the government’s stake in the lender would help bolster his legacy. As vice president of the European Central Bank, he’s been a vocal supporter of mergers as a way for banks to improve their profitability. In July, he said that consolidation is “inevitable” and could begin “in the next few weeks or the next few months.”
The ECB helped the deal over the line by allowing the Caixa Foundation to briefly raise its participation in CaixaBank over the regulatory limit of 40% so it wouldn’t violate its requirement to retain 30% ownership of the new business, Cinco Dias reported on Wednesday.
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