Let's not ruin a done deal

The leader of the Bank of Spain has denied a request to fund the Unicaja-Caja España merger. The supervisor stated that he does not want to create made-to-measure deals that give advantages to some lenders but not to others, especially when there will be more mergers in the future.

Because the Castilian savings bank did not need a governmental intervention, it cannot get a share protection plan. So it will need to raise more shares some other way. This means that Unicaja will have to resort to the only tool designed for all to use: the Frob.

And this would force Unicaja to pay debt interest rates that are higher than yield rates while at the same time trying to clean up its balance sheet.

Just when there was a deal on track to fix these savings banks, we are going to see it falter. The ideal would be to look for a way to close the deal and end the headaches.