Banco Sabadell and CaixaBank were born in Catalonia, but by 2017 they already had more than 70% of their business outside the country that made them prosper. Many people discovered this when in October 2017 the two entities moved their headquarters in response to the independence movement.

In 1844 La Caixa d’Estalvis i Mont de Pietat de Barcelona was born, which would later give rise to La Caixa. In 1881 the industrial bourgeoisie of Sabadell created Banc Sabadell. Both entities were born and grew in Catalonia until they became very important players in the Spanish financial system. In October 2017, the two institutions moved their headquarters out of Catalonia, in reaction to the social movement for independence and the referendum of 1 October. But what was the point of it all?

The reasons for leaving Catalonia

The main reason for abandoning the Catalans was that “people were not sure the bank would continue in the eurozone” if it kept its headquarters in Barcelona, as the then president of CaixaBank, Jordi Gual, explained in February 2020 in the Parliamentary committee on the application of article 155 of the Spanish Constitution. A weak excuse, because the banking licence depends on the Bank of Spain, whether you have your headquarters in Barcelona, Valencia, Paris or anywhere else.

There are many foreign banks operating in Spain, you just have to apply for the licence and get it authorised by the Bank of Spain. Therefore, if Catalonia had become independent, Catalan banks would have continued to operate under the umbrella of the Bank of Spain, unless the Bank of Spain had cancelled the licence. Obviously, this would be very difficult to do because it would create distrust in the Spanish financial system and in the Bank of Spain itself.

One clear reason to understand the relocation of the two banks out of Catalonia and to understand that, in fact, the Bank of Spain would never have withdrawn their licence, is that in 2017 neither of the two banks was Catalan. Banc Sabadell then concentrated only 29% of its business in Catalonia. And CaixaBank even less, 22%. It is clear that the Bank of Spain would not withdraw the licence to operate in Spain from two banks with more than 70% of their assets in Spain (excluding Catalonia).

Entities made by Catalans

The cross-cutting response of Catalan society on 3 October was decisive. On 5 October, Banc Sabadell announced the transfer of its registered office to Alicante, taking advantage of the fact that it already had facilities there. It became the first major Ibex company to leave Catalonia. The following day, CaixaBank approved its move to Valencia, taking advantage of the facilities it had at the Banco de Valencia, and the Fundació La Caixa moved to Palma de Mallorca.

The move was interpreted as undisguised pressure from the two banks on the Catalan citizens who had made them great. But the reality is that the only thing the two institutions did was to relocate following their business model. Catalonia represented less than 30% of the volume of Sabadell and CaixaBank. In October 2017 they were no longer Catalan banks working for the Catalans, it is a false idea that citizens discovered traumatically that October 5 years ago. CaixaBank and Banc Sabadell were already large financial corporations with more business outside Catalonia than inside, so they followed their interests.

At the end of October, CaixaBank’s share price was 192,717 million euros in deposits and Banc Sabadell, 98,654 million euros. As for their stock market value, the recovery took months: it was not until early 2018 that both CaixaBank and Banc Sabadell recovered their pre-independence referendum valuations. In the case of CaixaBank, it was back above 25,000 million euros and Banc Sabadell rose above 10,000 million euros.

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