(Bloomberg) -- BBVA would need to eliminate 3,700 jobs after taking over Banco Sabadell SA if it wants to hit a key savings target, according to Berenberg analyst Michael Christodoulou.
BBVA, whose official name is Banco Bilbao Vizcaya Argentaria SA, said on Wednesday that the proposed acquisition of Sabadell would result in staff cost reductions of €300 million ($324 million) for the combined entity. It was the first time BBVA gave details on the cuts since making a hostile bid for the smaller competitor in early May.
Sabadell Chief Executive Officer Cesar Gonzalez-Bueno — who opposed the deal — has cast doubt over the savings projections included in BBVA’s offer, saying the expense reduction target implies higher spending to achieve it than what the lender has predicted.
By contrast, Christodoulou said in a separate note published Wednesday that the details around the planned cuts given by BBVA yesterday “could provide some comfort” that its estimate for restructuring costs “is reasonable.”
Christodoulou also said he doesn’t expect “material objections” to the deal from the European Central Bank and Spanish anti-trust authorities. The regulators need to approve the bid before it can move forward.
The analyst arrived at his estimate for needed job cuts by comparing the goal for personnel costs savings that BBVA unveiled yesterday with an estimate of what Sabadell’s Spanish employees earn on average.
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