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Banking in Spain has seen big changes in recent years – but that’s not the end of it, as banks face further consolidation and new competitors

On first arriving to work in Madrid in the early 90’s, it was impossible not to be struck by the abundance of bars.  It was said that Spain had more than the rest of the European Union put together – true or not, it certainly felt like it. But it wasn’t just bars you would come across as you walked around Spanish cities – banks were also everywhere.   This was the time of rapid economic growth.  House prices were booming, and banks cheerfully handed out cheap mortgages to win new customers.  And in the pre-internet age, the quickest way for them to grow their business was to open branches. The British tried to get in on the action – Lloyds, Barclays and Nat West all had branch networks. None of them do now.  Lloyds sold out in 2014 before reaching its 100th anniversary in Spain, while Barclays, which at one point had nearly 600 branches, sold its network to Caixabank in 2015.  Barclays had for many years made decent profits, but competition, the economic environment and some bad decisions led to large losses, and the group pulled out. From this…… A lot has changed in Spanish banking since then.  Consolidation has been going on over the last three decades, but the recent banking crisis and property crash have accelerated the trend – five years ago there were 55 banking groups: now there are just 14.  And there’s more change to come.   Spain is still over-banked, with some 70 bank branches per 100,000 adult residents, almost double the ratio in France and nearly three times the UK figure.  Not surprisingly, branches are...

The juggernaut of Catalan independence rolls on. Should international companies with business in Catalonia be worried?

Take a look at the official web-site of the pro-secession Junts pel sí (Together for Yes) electoral platform, and you’ll come across a stack of arguments to justify Catalan independence.   It paints a country which, freed from the shackles and financial burden of belonging to Spain, would be a model of growth, with world class infrastructure, education and health systems and generous pensions – a kind of Denmark on the Med.   All this would be paid for with the money that would no longer be handed over to the rest of Spain. If it all sounds too good to be true, that’s probably because it is.  Things would not be quite so easy.  To start with, it is not clear that Junts pel si and the CUP will be able to deliver independence to their supporters.   And if they do, the economic outcome will be very different from what they have promised.   Six weeks on from the ‘plebiscite’ elections, Catalonia still has no Government.   Artur Mas, the former Catalan president and the Junts pel sí candidate – has yet to convince the anti-capitalist and fiercely pro-independence CUP to support him for President.  He has until 10th January to do so, otherwise new elections will be called.  Nobody among the secessionist groups wants that, so an agreement is likely.   Meanwhile, the process continues and last week the newly formed parliament passed a resolution announcing the start of a unilateral process of ‘disconnection’ from Spain. This is a brazen challenge to Spain’s Constitution.  The Spanish Government’s starting point for its defence has been the Constitutional Court, which has provisionally ‘suspended’ the resolution from the Catalan...

Catalan independence would have huge repercussions for Spain. But will it actually come about? This story will run, but to start off, here’s a short guide to what’s happening.

Sports fans around the world will be familiar with banners hung from the terraces at Catalan sporting events, declaring that “Catalonia is not Spain”.  The hope for many Catalans is that this wish will soon turn into reality. On 27th September elections were held in Catalonia to choose the autonomous government – but with a twist.   Dubbing it a ‘plebiscite’, parties supporting the right to self-rule joined together in one electoral list, known as Junts pel si (Together for Yes), and with a simple premise: if they won a majority of seats, they would formally declare the start of a unilateral independence process. It didn’t work out exactly as they had hoped.   Junts pel si ended up with 62 seats, 6 short of the 68 needed for an overall majority.  But another fierce supporter of independence, the CUP (Popular Unity Candidacy) – a far-left  anti-system and anti-capitalist party which had stayed out of the Junts pel si list, won a further 10 seats.  Count those in, and pro-independence groups have a sufficient majority in parliamentary seats to push ahead with the plan. Yet a month on from the vote, Catalans are still waiting for a Government to be formed.  The CUP and the former president Artur Mas, head of the centre-right Convergencia party and the promotor of the plebiscite formula, make unnatural bedfellows.   The CUP initially refused to back Mas or anyone from Convergencia as President of the new Government, and publicly at least haven’t shifted from that view. The original road map announced by Mas envisaged the declaration of the start of the process once a new Government...