The FinTech Year in Stories: June

BBVA, the second-largest bank in Spain, has announced plans to introduce a new digital bank in Germany, to mirror its success in Italy and boost its customer acquisition rate.

Its digital model in Italy, BBVA Italia – a market it entered in 2021 – has been a resounding success, and BBVA hopes to expand its customer base to 600,000 in the country by the end of 2024.

BBVA: Growing in markets to rival Santander

BBVA’s planned German expansion comes after the submission of a US$13.2bn hostile takeover bid for Sabadell, investing heavily in digital banking services and expanding in emerging markets, such as Mexico.

A LatAm expansion is something BBVA’s rival, Santander, has also done – as both institutions look to expand customer bases internationally.

Emerging markets like Mexico have helped BBVA boost income when it has struggled in more mature markets.

Peio Belausteguigoitia, BBVA’s Country Manager for Spain, says: “Logically we are replicating the successful model we have had in Italy in the German market, where we hope to have a digital bank by 2025.”

Its move to digital international expansion comes as its native market plans have shifted.

BBVA intends to offload 300 branches in its native Spain, and its move to acquire Sadabell is aimed to further its business banking operations. Sabadell has a significant market position in small and mid-sized lending in Spain, where BBVA now hopes to add 80,000 SME clients by the end of 2024.

However, its bid to acquire Sabadell is currently opposed by the Spanish government and was rejected by Sabadell’s board – prompting BBVA to plan a direct acquisition attempt via Sadabell’s shareholders.

Speculation has been mounting that BBVA may look to sell UK high street bank TSB to fund an improved bid for Sadabell. Should its bid – made directly to Sadabell holders – succeed, it’s unclear if BBVA would still plan to offload TSB.

The Spanish banking giant has set itself a minimum Sadabell share approval threshold of 50.01% but says the regulatory takeover approval process could take between six to eight months before a bid can be formally submitted to shareholders.

Speaking at a financial event, Peio Belausteguigoitia said he was ‘confident’ a takeover could be completed. If not, BBVA will focus on achieving growth organically in its native Spain.