Spain’s second-largest bank BBVA plans to expand its digital banking services to Germany to increase its customer base and mirror its success in Italy, the bank’s country manager in Spain said on Wednesday.
BBVA, which recently submitted a €12.28 billion ($13.20 billion) hostile takeover bid for Sabadell, has invested heavily in digital banking and, like its larger Spanish rival Santander, is growing in emerging economies, such as Mexico, while it has struggled in the past to grow revenues in mature markets.
In October 2021, BBVA entered the consumer lending market in Italy by offering free online accounts to take advantage of the shift to digital banking in that country during the pandemic.
It had reached 500,000 customers by the beginning of June in Italy, two and a half years ahead of schedule, Peio Belausteguigoitia said at a financial event in Santander.
The bank now aims to reach 600,000 customers by the end of 2024.
“Logically, we are replicating the successful model we had in Italy in the German market (…) where we hope to have a digital bank by 2025,” Mr Belausteguigoitia said.
The bank is also in the process of selling 300 inactive branches in Spain as part of its digital shift, Belausteguigoitia added.
One of the reasons BBVA wants Sabadell is the small lender’s significant position in the small and medium business lending market in Spain, where BBVA now aims to add 80,000 new SME customers in 2024, the BBVA executive said .
The offer, which was opposed by the Spanish government, was rejected by Sabadell’s board of directors, prompting BBVA to launch a hostile offer directly to Sabadell shareholders.
Belausteguigoitia said BBVA’s potential presence in the UK through TSB, Sabadell’s UK bank, would be “compatible” with its stake in Atom Bank, the UK’s leading app-based lender.
The market has speculated on whether it would like to hold or sell TSB if the offer was successful.
BBVA, which had set a minimum approval threshold of 50.01% of Sabadell’s shares, said the regulatory process could take six to eight months, before being officially submitted to shareholders.
BBVA is “confident” in obtaining all approvals for its bid and is working with all regulatory authorities, the country manager said, adding that the bank would focus on organic growth in Spain if its bid was not successful. detention.
The bank called a special shareholder meeting on July 5 to approve a stock issue to finance the offering.
The BBVA director said the three-week proxy voting process began last week and so far voting rates have been normal and positive.
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