Cajas consolidation encroaches on fund selectors’ options
With the number of Spanish mutual saving banks down by two-thirds, the consolidation of the mutual funds range available to selectors is accelerating.
Spain’s cajas, the domestic mutual savings banks, are undergoing a drastic consolidation process, triggering a restructuring of the products and services offered by local asset managers. Already, the number of Spanish cajas has shrunk from 45 to 15, but the banks are among the most affected, as the country heads for a eurozone bailout.
Symbolic of this trend is Bankia, Spain’s fourth-largest bank by assets. Bankia was formed in July 2011 from the merger of seven savings banks: Caja Madrid, Bancaja, Caja de Canarias, Caja de Ávila, Caixa Laietana, Caja Segovia and Caja Rioja. As part of the merger process, Bankia Fondos was launched in May 2011 with €7.4bn assets under management and a 5% market share.
The new company included products previously managed by Gesmadrid, Bancaja Funds and Ges Layetana, which saw the reduction in the number of funds offered to a quarter.
But the merger was not sufficient to insulate the lender from the banking crisis. On 25 May, Bankia was granted a bailout of €19bn, the largest in Spain’s history, which led to the resignation of chief executive Rodrigo Rato.
A senior asset manager in Madrid said: “The consolidation process between the cajas will end up with fewer asset management units, fewer products and fewer fund selectors with bigger purchasing power. It will also reshape the way international funds are sold in this market as the counterparts will change or at least be reduced in number.”
Data published by trade association Inverco show that, at the end of June, 2,535 funds were available in Spain, or 8.35% less than at the beginning of the year. This has left fund selectors with fewer options, as the ten leading players already control 90% of distribution.
The consolidation process has made InverCaixa, the fund management unit of CaixaBank, one of the largest financial entities in Spain. But it will grow even bigger now that CaixaBank is merging with Banca Cívica.
On 3 August, CaixaBank notified Spain’s market regulator CNMV about the change of name of about 30 funds previously marketed by Banca Civica.
When the integration process is completed, CaixaBank will control about 13.7% of the Spanish funds market, directly competing with the biggest players Santander and BBVA.
Spain Integration Processes Roadmap: