In May, BBVA made an attempt at a hostile takeover of its market competitor, Sabadell, aiming to bolster its market presence. In June, it unveiled plans to introduce a new digital banking platform in Germany by 2025, positioning it as a competitor to N26 and Revolut
BBVA’s strategic advancement in June included announcing the forthcoming launch of its digital banking services in Germany. The bank has previously invested substantially in digital banking and has expanded into emerging markets, such as Mexico. These markets have contributed to BBVA’s revenue growth, particularly when facing challenges in more established markets. Now, BBVA intends to leverage its strengthened financial position to further its expansion across Europe.
BBVA aims to build on Italy success in Germany
The bank has already implemented a digital banking model in Italy, which it considers successful, and aims to replicate this success in Germany. The Italian digital banking service, launched in October 2021, has already attracted 500,000 customers, surpassing its projections by two and a half years.
In Germany, N26 has experienced issues with regulatory compliance and has recently been issued another fine due to deficiencies in its suspicious activity reporting. Although the growth cap on N26 was lifted at the beginning of June 2024, the bank has expanded at a much slower rate compared to some of the larger digital challengers throughout Europe. With Revolut being the only other significant digital player in the German market, BBVA has recognised an opportunity to attract customers in an environment with limited presence of alternative banking options. Given the potential negative sentiment surrounding N26 due to its historical encounters with regulators, BBVA’s launch stands a significant chance of success.
In addition to these efforts, BBVA is persisting in its takeover bid for Sabadell, Spain’s fourth-largest bank. BBVA is targeting Sabadell to capitalise on the smaller bank’s substantial market share in SME lending in Spain. BBVA’s goal is to acquire 80,000 new SME clients by 2024. Despite opposition from the Spanish government, BBVA proceeded with a hostile offer directly to Sabadell’s shareholders after the board rejected the initial bid. In June, it was stated that even if BBVA were to end up owning two separate Spanish banks, the venture would still be considered beneficial.
GlobalData Global Retail Banking Analytics
Data from GlobalData’s Global Retail Banking Analytics suggests that the Spanish banking landscape has experienced significant consolidation over the past decade. The proposed acquisition of Sabadell by BBVA is poised to establish one of Europe’s top 10 banks, boasting in excess of 100 million customers and assets surpassing €1trn ($1.08trn). Should the merger proceed, the resultant institution would rank as the second-largest provider of personal loans and mortgage lending—trailing only Caixa and surpassing Santander, which would fall to third place. Additionally, it would become the pre-eminent credit card lender by a considerable margin.
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