the end it appears that the fate of the Galician boxes look the same, fusion. For the ordinary people we have sold the outcome as the only possible and valid to safeguard the future of Galicia. My biggest regret is that the arguments advanced by advocates of essences homelands have been scarce on what's important, economically, and very neat (in every sense) in the ideological and symbolic. A review of the opinion columns of the regional press, TV, radio and the Internet is shown. Few dissenting voices was that official discourse, and not contrary to the merger, but they desired a little caution and rationality to the process. As always, the interventional device is much more able to convince public opinion and protectionist rhetoric, leaving little ground to arguments for greater space for the free market.
In my blog I have defended by active and passive, non-interventionism of the Xunta, considering, and not for ideological reasons related to liberalism (which I have), that the merger did not arise from a real need and motivation economic, but political. What does this mean? For the solution of the problems surrounding the Galician savings banks are not going to solve a political move, since this solution imprisonment and aggravated the great failure of the system of boxes, its dependence on political power. However, few data analyze the possible future cash birth. Before
noblesse oblige to admit that I am far from an expert on this than whites technically called merger & acquisitions, commercial castizo that translate as mergers and acquisitions. My little knowledge of the subject does not prevent reading from here and there, concluded that for such a bonding process to succeed, must be met a series of fundamental preconditions, which can be collected at the reasons that cause this result. Schematically
fall into three main motivations that lead us to adopt a merger:
In my blog I have defended by active and passive, non-interventionism of the Xunta, considering, and not for ideological reasons related to liberalism (which I have), that the merger did not arise from a real need and motivation economic, but political. What does this mean? For the solution of the problems surrounding the Galician savings banks are not going to solve a political move, since this solution imprisonment and aggravated the great failure of the system of boxes, its dependence on political power. However, few data analyze the possible future cash birth. Before
noblesse oblige to admit that I am far from an expert on this than whites technically called merger & acquisitions, commercial castizo that translate as mergers and acquisitions. My little knowledge of the subject does not prevent reading from here and there, concluded that for such a bonding process to succeed, must be met a series of fundamental preconditions, which can be collected at the reasons that cause this result. Schematically
fall into three main motivations that lead us to adopt a merger:
not necessary to be an expert in M \u200b\u200b& A to realize that at the junction of Caixanova and Caixa Galicia just have prevailed for its absence primarily economically motivated. Just read the chart to realize that personal motivations and hybrid have guided the process. Why?:
- Improvements in economic financial ratio does not seem to improve dramatically. The few data have seen the light of the report commissioned by the company Xunta KPMG tell us
- the ROE (Return on Equity), an indicator that shows us the benefit to an investor on the capital amounts to a 13.2% in the new entity, as opposed to the original 7.95% 4.51% Caixanova and Caixa Galicia. We must be careful with this because, since, as this indicator divide net profit by net liabilities (equity + reserves), reserve the game distorts the comparison because the allocation to this account book is not the same amount in both boxes. In fact, Caixa Galicia has made provisions for reservations in higher quantity than its neighbor of Vigo, so its ratio out so low. Increased the numerator by the sum of these benefits, but the sum of the denominator is not an accurate picture of net liabilities of the two entities for reservations.
- The Tier 1 ratio which measures the solvency of banks, has a limit set by the Basel Committee on Banking at 8%. Merging the two get over it by a narrow margin at 9.0%.
- Efficiency, which measures the expenses we incur a bank to earn $ 100, gives a figure of 47.7%, compared with 41.0% of Caixanova and 45.8% of Caixa Galicia. This is one of the most striking indicators, it shows that the merger does not imply a gain in efficiency really important, but rather the opposite. Recall that the efficiency ratio through the banking sector in Spain is at 2008 data, 44.4%.
- Another issue that has not been discussed much is that a merger should be able to improve the synergy of a company. What do you mean by synergy? The ability to obtain separate benefits neither side could get. Do they exist? Absolutely, but lower than the required cuts are going to have to perform if they wish to exploit these synergies. Why? Because the business models of both boxes are duplicated in the original territory, resulting in an overlap of offices and activities of concern. This means that they will have to close branches and lay off people (see below) in greater quantities than if the merger had taken place with a box as Bancaja (Valencia) and Caja Madrid as its presence in Galicia is much lower.
- Finally, you can not hide that the real interest of political power is to continue relying on a financial institution to cover their political agendas. That is the great vice sector boxes. And this defect is not resolved because the composition of the new entity strengthens the presence of the Regional Government and the municipalities in the Assembly.
So far in fact, all messages and speeches have emphasized the beneficial process, but the KPMG report recognizes that the merger would be nothing more and nothing less than the closure of 280 offices and laying off 1,300 employees. Which makes sense considering that the two boxes share the main market and therefore the duplication of offices is outrageous ( see map). To this is added the internal struggles to achieve the headquarters, in a merger "normal" try to save costs, as seen here, the financial logic seems to be fulfilled, because according to press reports, the agreement is to locate the headquarters in Santiago de Compostela with two operational headquarters in A Coruña and Vigo. Where once there were two and it is logical that a stay of the merger are three. The effectiveness and efficiency in economic policy always so absent.
