CaixaBank and Bankia agree to merge to create Spain’s Largest Domestic Bank

Spanish bank CaixaBank SA said on Friday that its board has agreed to approve and sign the joint merger with Bankia SA.

Spanish bank CaixaBank SA said on Friday that its board has agreed to approve and sign the joint merger with Bankia SA. This merger will create the largest Spanish domestic bank with around 548 billion pounds in assets.

The deal values Bankia at 3.8 billion euros and the joint bank will deliver combined annual cost cuts and increased revenue of about 1.1 billion euros

The banks have said that the merger will be completed during the first quarter of the next year. Caixabank has said that till now it has not made any decisions regarding the prospect of closures but its combined entity would analyze workforce overlaps, duplications and economics of scale.

Bankia’s chairman Jose Ignacio Tellaeche said on Friday that he was “reasonably comfortable” that the merger would get antitrust approval. Jose Tallaeche will serve as the executive chairman with limited powers. CaixaBank’s CEO Gonzola Gortazar will be the chief executive.

CaixaBank said it expects the acquisition to generate about 770 million euros of cost synergies a year and additional annual revenues of about 290 million euros.

The new bank with 51,500 employees will be called CaixaBank and the name Bankia will be dropped.