MADRID, Jan 15 (Reuters) - Spain's antitrust watchdog stated on Wednesday that it did not consider the relatively low number of banks in the country to be a major factor contributing to the lower returns on deposits compared to other euro zone countries.
This announcement followed BBVA's hostile takeover bid for smaller lender Sabadell, which is currently in progress.
The Spanish government had instructed the CNMC watchdog to investigate whether a lack of competition in the banking sector was hindering lenders from offering higher interest rates on retail deposits.
As of June 2024, the average return on household deposits in the euro zone was over double that in Spain.
The CNMC highlighted that concentration indices in Spain were at moderate levels, though notably higher than those in comparable large economies in the euro zone. While Caixabank, BBVA, and Santander held extensive market presence, other entities, such as certain rural savings banks, had significant market shares in specific geographical areas.
Rather than the number of banks, the CNMC pointed out that the main reasons for the lower returns were the costs related to switching banks, insufficient information comparability for customers, limited alternative products, and the necessity for enhanced financial education initiatives.
The watchdog recommended that lenders facilitate access to a wide array of deposits and alternative financial products, address customer information challenges, enhance transparency, and decrease costs associated with transferring between institutions to tackle the issue.