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Big Catalan bank to move headquarters out of Barcelona

by FT

October 5, 2017 | 7:24 pm
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The second-largest bank based in Catalonia has decided to move its legal headquarters out of the region as Catalan separatists and the Spanish authorities hurtle towards a showdown on Monday over the region’s push for independence.

The decision on Thursday by Banco de Sabadell to move its headquarters to the eastern Spanish town of Alicante came at the same time that CaixaBank, the biggest bank in the region and the country’s third largest, also considered redomiciling outside Catalonia.

The moves reflect the fraying nerves in the region’s business community as relations between Barcelona and Madrid deteriorated even further, with a Spanish court ordering the suspension of Monday’s special session of Catalonia’s parliament.

Regional lawmakers were expected to vote on making a unilateral declaration of independence at the session.

While the Catalan parliament may still try to convene in defiance of Thursday’s ruling, the court decision highlights how Madrid is doing everything in its power to prevent the region from formally breaking away following Sunday’s referendum, which was held despite Spanish courts banning the vote.

It raises the prospect of Spanish authorities deploying police to prevent parliamentarians from convening. The chances of police clashes were heightened by a call on Thursday from a leading separatist campaign group for mass demonstrations on Monday to ensure that the parliamentary session can be held.

“Let us be ready and waiting,” the Catalan National Assembly, the activist group, said in a message to its members.

People briefed on the decision by Sabadell, the fifth largest bank in Spain, said that the sharp fall in the group’s share price on Wednesday had prompted executives to accelerate discussions on moving the headquarters to assuage investor and depositor fears.

One person said the move was designed to “limit uncertainty” caused by the push for independence. Similar discussions were being held at CaixaBank, people close to the bank said. “Money and fear don’t go together,” said one briefed on CaixaBank‘s current thinking.

Although Carles Puigdemont, the Catalan president, had not committed to an independence declaration at Monday’s session, several MPs from his governing party had signalled their intention, prompting anti-independence parties to seek the judicial intervention.

People close to CaixaBank said that executives were concerned that a declaration of independence on Monday would prompt a crackdown by the Spanish government, destabilising the region and its capital, Barcelona.

CaixaBank is expected to keep its corporate headquarters in Barcelona but may conclude that it has to move its legal seat to protect the interests of depositors. The bank and the Caixa foundation that controls it enjoy an outsized presence in the region, both as an economic and financial powerhouse and as a sponsor of cultural and social programmes in Catalonia and beyond.

One person close to Sabadell, which is regulated by the European Central Bank and the Bank of Spain, said that its decision was partially motivated by the need to remain within the EU to maintain regulatory continuity. Under EU treaties, a region that breaks away from an EU member state must re-apply for membership. Although the Spanish and EU authorities would refuse to recognise Catalonia as independent, meaning the region’s banks would remain inside the eurozone, bankers want to avoid any semblance of doubt to shore up confidence. If a bank wants access to the European Central Bank’s cash auctions, it must have at the very least a subsidiary located in the single currency bloc.

Sabadell has been in Catalonia for 140 years. It changed its bylaws last year which means that a change of legal headquarters will be immediate. The decision also rests solely with the bank’s board, which rubber stamped the decision on Thursday evening, rather than shareholders. Josep Oliu, Sabadell’s chairman, on Tuesday flagged that the lender was considering a change of domicile, telling a conference that the bank would take “necessary measures to continue operating normally inside the eurozone”. CaixaBank signalled its concern on Tuesday, in a communication to staff telling them to reassure clients about “our commitment to the defence of their interests”. It said that the bank “reiterated that the sole objective of the entity is to protect at all times the interests of its customers, shareholders and employees, guaranteeing the integrity of deposits”.

 

FT


by FT

October 5, 2017 | 7:24 pm
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