Bank Mergers in Check: Between Brussels and National Interests
Ion Jauregui – Analyst at ActivTrades
Banking consolidation plans in Europe have gained momentum in 2025, driven by the Draghi and Letta reports, which advocate for the creation of pan-European banks capable of competing globally with U.S. and Chinese giants. However, the recent BBVA-Sabadell and UniCredit-BPM merger cases expose growing tensions between the EU’s ambitions and national protectionist policies. Spain and Italy are placing roadblocks on two key deals, casting doubt on real progress toward an effective banking union, while political intervention in operations with continent-wide implications is raising concern.
State Intervention: Protection or Market Obstacle?
Both the Spanish and Italian governments have imposed strict conditions on the mergers. In BBVA’s case, Spain’s government, led by Pedro Sánchez, demands that Sabadell remain a separate entity for at least three years and prohibits layoffs directly related to the deal. Although BBVA’s chairman Carlos Torres has not backed down, the conditions have triggered legal and institutional tensions.
Italy has taken an even tougher stance. The government under Giorgia Meloni requires UniCredit to fully exit Russia by summer 2026, maintain BPM’s branch network, and preserve loan, deposit, and asset ratios. CEO Andrea Orcel hasn’t ruled out the deal but has clearly cooled expectations.
Brussels Takes Notice
Though these demands are framed as serving the public interest, they may conflict with the EU’s principle of free movement of capital. The European Commission has launched the EU Pilot mechanism, a preliminary step before a possible infringement procedure, to assess the legality of the actions. While no formal case has been opened yet, Brussels has made it clear: political interference threatens the credibility of the single banking market and could deter institutional investors. As ECB Vice President Luis de Guindos bluntly stated: “These interventions limit the narrative of European financial integration.” His words echo the technocratic tone of Draghi’s banking memo for Europe.
BBVA and UniCredit Face the Market
Despite the political noise, both banks remain fundamentally solid. BBVA’s strong presence in Latin America, attractive P/E ratio, and dividend yield stand out. Still, restrictive conditions could slow integration. UniCredit boasts robust capital ratios and a strong ROE, but regulatory uncertainty and geopolitical exposure continue to weigh on its strategic outlook.
Fundamental Analysis
BBVA:
UniCredit:
Technical Analysis
BBVA:
UniCredit:
Toward a Real Banking Union?
Current tensions raise a pressing question: can the EU advance its banking union if each state sets its own rules? Brussels’ technocratic push for free capital movement is increasingly at odds with a wave of national interventionism. The conditions imposed in these two high-profile mergers have turned them into regulatory battlegrounds, introducing not just regulatory risk, but also financial and geopolitical uncertainty into the equation—affecting both valuation and the strategic path of the banks involved.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success. Regulated status does not guarantee security.
Ion Jauregui – Analyst at ActivTrades
Banking consolidation plans in Europe have gained momentum in 2025, driven by the Draghi and Letta reports, which advocate for the creation of pan-European banks capable of competing globally with U.S. and Chinese giants. However, the recent BBVA-Sabadell and UniCredit-BPM merger cases expose growing tensions between the EU’s ambitions and national protectionist policies. Spain and Italy are placing roadblocks on two key deals, casting doubt on real progress toward an effective banking union, while political intervention in operations with continent-wide implications is raising concern.
State Intervention: Protection or Market Obstacle?
Both the Spanish and Italian governments have imposed strict conditions on the mergers. In BBVA’s case, Spain’s government, led by Pedro Sánchez, demands that Sabadell remain a separate entity for at least three years and prohibits layoffs directly related to the deal. Although BBVA’s chairman Carlos Torres has not backed down, the conditions have triggered legal and institutional tensions.
Italy has taken an even tougher stance. The government under Giorgia Meloni requires UniCredit to fully exit Russia by summer 2026, maintain BPM’s branch network, and preserve loan, deposit, and asset ratios. CEO Andrea Orcel hasn’t ruled out the deal but has clearly cooled expectations.
Brussels Takes Notice
Though these demands are framed as serving the public interest, they may conflict with the EU’s principle of free movement of capital. The European Commission has launched the EU Pilot mechanism, a preliminary step before a possible infringement procedure, to assess the legality of the actions. While no formal case has been opened yet, Brussels has made it clear: political interference threatens the credibility of the single banking market and could deter institutional investors. As ECB Vice President Luis de Guindos bluntly stated: “These interventions limit the narrative of European financial integration.” His words echo the technocratic tone of Draghi’s banking memo for Europe.
BBVA and UniCredit Face the Market
Despite the political noise, both banks remain fundamentally solid. BBVA’s strong presence in Latin America, attractive P/E ratio, and dividend yield stand out. Still, restrictive conditions could slow integration. UniCredit boasts robust capital ratios and a strong ROE, but regulatory uncertainty and geopolitical exposure continue to weigh on its strategic outlook.
Fundamental Analysis
BBVA:
- Trades at an attractive P/E ratio around 7x with a dividend yield above 6%.
- Strong exposure to emerging markets, especially Mexico, offers growth potential.
- Merger restrictions with Sabadell may delay synergies and increase short-term costs.
UniCredit:
- Solid capital (CET1 fully loaded above 15%) and ROE near 14%.
- BPM acquisition would boost market share in Italy, but political hurdles could limit benefits.
- Geopolitical uncertainty (Russia exit) adds execution pressure.
Technical Analysis
BBVA:
- Consolidating between €13.90 (highs) and €12.645, with key supports at €11.085 and €9.80.
- A breakout above resistance could trigger further upside, though regulatory pressure may limit short-term gains.
- Current point of control at €13.035 aligns with the 50-day MA, supporting the latest bullish move. RSI at 54.96% is neutral; MACD shows signs of bullish consolidation.
UniCredit:
- Trading at all-time highs of €61.56 after breaking the €58.66–€54.34 consolidation range; point of control at €56.64.
- Supports at €50.05 and just below €39; a move beyond €39 would require BPM deal clarity.
- A drop below €33 could lead to €30, a psychological support level, though strong earnings make this unlikely in the short term.
- RSI at 59.02% is slightly overbought and correcting from the recent rally, which remains supported by the 50-day MA. MACD is trending upward.
Toward a Real Banking Union?
Current tensions raise a pressing question: can the EU advance its banking union if each state sets its own rules? Brussels’ technocratic push for free capital movement is increasingly at odds with a wave of national interventionism. The conditions imposed in these two high-profile mergers have turned them into regulatory battlegrounds, introducing not just regulatory risk, but also financial and geopolitical uncertainty into the equation—affecting both valuation and the strategic path of the banks involved.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success. Regulated status does not guarantee security.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.