11Onze Check: Banco de Sabadell is doing well
Since the failed attempt at a merger between Banco Sabadell and BBVA, which was intended to cut costs to cope with the stock market crash of recent years, the two banks have been competing to justify their decision to go it alone with a story that sounds like something out of a fairytale. A perfectly legitimate marketing strategy, but one that in no way justifies the media repeating the same propaganda without any kind of filter. We analyse the news published by ‘La Razón’ using the Bias Method.
The sale of BBVA’s subsidiary in the United States provided the bank with 9.6 billion in capital. This infusion of liquidity, at a time of low market capitalisation performance during which it was very difficult to increase capital, revived the possibility of a merger between the two entities, which has finally been postponed indefinitely.
Nevertheless, the trend towards a banking consolidation in the form of an oligopoly, or even duopoly, on the part of traditional Spanish banks seems inevitable. The bursting of the real estate bubble in 2008 spearheaded a chain of crises, mainly caused by the deregulation of the financial system, which have been hitting the systemic banks, and which have ended up being paid for by the taxpayer, who, on the other hand, is also the most damaged party in this process of consolidation.
Likewise, new technologies have made possible the strong entry of fintechs into the financial world, until now dominated by traditional banks, further eroding their market share, especially by the new generations. The result is that these entities are subject to suffocating pressure on prices, both in terms of loans and payment platforms, as well as in terms of deposit-taking. A scenario that, together with the flight of customers tired of abusive commissions, can be compensated in the short term with staff cuts and the massive closure of branches and cashpoints.
In this context, and in view of the need to reassure investors, the declarations of César González Bueno, CEO of Banco Sabadell, are understandable, assuring that the good evolution of the entity justifies the decision to go it alone. Even so, the data are not always positive, with falls in mortgage production compared to the first quarter of 2021 and in fees for card use, as well as a drop in market share, which has lost up to 14 basis points.
At 11Onze Check we take all these factors into account when analysing how the article in ‘La Razón’ presents the information on Banco Sabadell’s positive results, and we conclude that it is 60% biased.
The article limits itself to publishing the information given by Banco Sabadell, supposedly in the press release. Even so, the published figures are presented without the source of information and without any reference. The statements of César González Bueno, CEO, and Leopoldo Alvear, CFO, are also published, so we only hear the view of the banks.
There is no alternative voice to Banco Sabadell’s official statement. Moreover, the bank’s statements are taken for granted without checking the data, which is not always good. Nor is any kind of context offered in regard to the bank’s problems in improving profitability, despite the fact that it is the bank that has laid off the most people in proportion to its workforce.
While the article is clearly a commercial disguised as news that has been repeated in other bank-friendly media, it is worth questioning the motives behind the need for this positive news. Is it an attempt to calm investors worried about massive account closures or low profitability? Are they trying to cover up Banco Sabadell’s fragility?
Banco Sabadell’s links with Grupo Planeta, owner of ‘La Razón’, are no secret. There is, therefore, a clear conflict of interests that would explain why the newspaper seems to be part of a media campaign by Banco Sabadell with the intention of giving a positive image of the bank.
The information is foggy because the article talks about the good results of Banco Sabadell’s commercial management in a news format, when in fact it is neither news nor such good management when the official data are analysed.
VOCATION OF SERVICE
There is no doubt that the article is not intended to serve the public interest, but to act as a megaphone for the bank’s narrative and, therefore, to serve its interests.
If you want to know more about the Bias Method we have used to check this information, you will find it here. If you want to send us financial information to verify, you can do so by writing to [email protected]
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