Spain’s CaixaBank has secured a key regulatory approval for the acquisition of its local rival Bankia.
According to a Reuters report, Spanish competition regulator CNMC approved the deal albeit with some conditions.
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The combined business will not have to divest any unit but need to agree to certain conditions for retail banking business.
An analysis found Caixabank will have an effective monopoly in 21 postal codes across Spain, following the merger.
CNMC asked Caixabank to ensure same terms and conditions for existing Bankia customers in those areas for three years.
It is also barred from closing any branches without CNMC’s authorisation in such locations.
CNMC did not set any conditions for other business areas such as investment or corporate banking.
In September last year, CaixaBank agreed to acquire Bankia to create the largest domestic lender in Spain.
The combined business is expected to have more than €650bn in assets, 6,300 branches in Spain and 51,500 employees.
The deal still awaits green light from the economy ministry and is expected to close by the end of this month.
At the time of announcement, Bankia chairman Jose Ignacio Goirigolzarri said: “With this operation, we will form the principal Spanish franchise at a moment when it’s more necessary than ever to create entities with a critical size.”
