Are bank mergers still relevant in spite of an oligopolistic market? The strategy behind the Spanish case.

Abstract

The banking sector we used to know is changing. In Spain for example, the Bank has recently been in favor of more bank mergers. One will wonder which are the stakes behind this phenomenon. Therefore , this thesis aims to analyze whether bank mergers are an evidence of a strategic evolution in the financial model of the Spanish banking system. To do so, we will: - outline the theoretical framework of the banking industry in Spain and the merger and acquisition processes; - examinate the valuation of a bank made for a merger; - identify the most important variables when choosing a bank merger; - expose the new emerging challenges in the spanish banking sector. In addition to these considerations we will develop an empirical study through the elaboration of a financial model of a bank merger between two entities Caixabank S.A., and Bankia S.A, which are expected to merge in the coming months.