The Strategist

Large banks are leaving Catalonia

10/09/2017 - 14:29

One of the largest Catalan banks Sabadell decided to move its headquarters from the region striving for independence from Spain to the Spanish city of Alicante. The credit institute reported on the last week after an emergency meeting of its board.

Management of its rival CaixaBank held a similar meeting about at the same time, Reuters reported. With reference to informed sources, the agency points out that, based on the situation with CaixaBank, the authorities in Madrid intend to issue an order that will facilitate withdrawal of enterprises from Catalonia. This document will allow the bank to change its legal address without convening a shareholders' meeting.

The credit institutions’ move could hit hard on the financial industry of Catalonia.

Because of the conflict around the holding of a referendum on independence in Catalonia, credit agencies are lowering the region’s ratings. In the evening of October 5, Fitch agency announced that it intends to lower the credit rating of Catalonia due to "unpredictable developments" and the possible violation of financial flows to the autonomous community. A day earlier, another rating agency, Standard & Poor's, pointed to the possibility of reducing the rating of Catalonia in the next three months. It placed Catalonia's "B + / B" ratings for a review (CreditWatch) with a "negative outlook".