Catalan banks prepare headquarter shifts

Sabadell's board had given the green light to the move in a meeting Thursday afternoon, according to Spanish media reports, saying the decision was prompted by a sharp fall in the bank's share price on Wednesday and an effort by Sabadell to dispell fears of investors and depositors about the risk of Catalan independence. The lender's preferred destination for new headquarters is Catalonia's neighboring region of Valencia, specifically the area of Alicante, the reports said.

Spain's third biggest bank, CaixaBank, is also considering a temporary move of its legal domicile. The Barcelona-based lender would keep its corporate headquarters in the Catalan capital but may conclude that it has to move its legal seat to the Balearic Islands to protect the interests of depositors, Spanish newspaper El Mundo reported Thursday.

The banks' concern is that any declaration of independence in Barcelona would prompt a crackdown by the Spanish government in Madrid, destabilizing the region and the city.

Read more: Catalan separatist movement driven by more than just economics

Spanish Economy Minister Luis de Guindos said the bank's were "fully committed" to the interests of their clients, depositors and shareholders. "These institutions are quite solvent, are very strong," he told Bloomberg Television.

Bank run after independence?

In a memo to employees, CaixaBank said they should "pro-actively communicate to our clients our commitment to the defense of their interests, a commitment which has guided our actions through our history and will guide the future decisions which, if necessary, will be made."

Reportedly, some wealthy clients of Catalan banks have begun moving money to lenders outside the region or inquired about doing so. Bank clients had started opening accounts in branches across the border in regions like Aragon or Valencia, according to Roberto Tornamira, head of the financial-institutions division at trade union UGT.

However, both banks have claimed that there is business as usual despite logical concern in some customers. "Operation in the network is absolutely normal and there is no significant movement of deposits," Sabadell said in a statement, adding that flows of money out of Catalonia were "totally irrelevant."

CaixaBank also said it had not been affected by any "unusual movements in customer deposits," and that there was "business as usual."

Legal issues

A potential concern for bank clients would be Catalonia's potential status outside the European Union in the event of independence. In Strasbourg on Wednesday, Manfred Weber, leader of the biggest group at the European Parliament, warned Catalans that "who leaves Spain, leaves the European Union," including the euro area and the single market.

The European Commission also stressed that any entity seceding from an EU state would have to reapply for EU membership. Although the Spanish and EU authorities would refuse to recognize Catalonia as independent, meaning the region's banks would remain inside the eurozone, bankers are eager to avoid any uncertainty over their business.

The European Central Bank said that it was monitoring the impact of the Catalonia crisis on the region's banking system but saw no immediate reason for concern.

uhe/tr (Reuters, AFP)