Sabadell Is Set to Name Cesar Gonzalez-Bueno as Next CEO

Banco de Sabadell SA is set to name Cesar Gonzalez-Bueno as chief executive officer, replacing Jaime Guardiola, as the Spanish lender struggles to chart a path forward after short-lived talks on a combination with larger rival Banco Bilbao Vizcaya Argentaria SA.

Guardiola’s departure will be announced as soon as this week, with his successor set to be named shortly after, according to people with knowledge of the matter, who asked not to be identified because the information is confidential.

Sabadell Is Set to Name Cesar Gonzalez-Bueno as Next CEO

Gonzalez-Bueno is on the board of Sabadell’s U.K. arm, TSB Bank Plc. He helped ING Groep NV launch its operations in Spain more than two decades ago as CEO of the unit there, and now serves as chairman of ING Bank Spain and Portugal’s advisory board. Sabadell is bringing him on board in part for his digital expertise, two of the people said.

Besides his work with ING, Gonzalez-Bueno helped set up EVO Banco when he was CEO of Novagalicia, now Abanca. EVO was later sold to Bankinter SA.

Discussions about a purchase of Sabadell by BBVA to create the second-largest domestic lender in Spain collapsed late in November after the two sides couldn’t agree on the price. Spain has been at the forefront of a wave of mergers that’s reshaping Europe’s financial sector as the pandemic fuels loan losses and forces lenders to cut costs.

Sabadell declined to comment. The shares fell as much as 1.9% in Madrid trading and were down 2.4% as of 4:26 p.m.

Sabadell had planned to replace the CEO earlier in the year, but the plan was stalled by the pandemic and the subsequent failed talks with BBVA, according to one of the people. Discussions between the two banks gathered momentum after BBVA sold its U.S. businesses for $11.6 billion in cash, boosting its CET1 capital by 300 basis points.

The talks ended after less than two weeks. BBVA initially valued Sabadell at about 2.5 billion euros ($3.1 billion) but the bank demanded more after its shares rallied on the talks as well as optimism about a Covid-19 vaccine, according to a person familiar with the conversations.

Sabadell’s CEO change also falls into a wider European trend of the replacement of top executives. UniCredit SpA and UBS Group AG have appointed new chief executives in recent weeks, and Credit Suisse Group AG named a new chairman.

Guardiola is likely to remain on Sabadell’s board, two of the people said. His exit from the No. 2 position will bring an end to one of the longest-standing duos in Spanish banking since the financial crisis: He has served as CEO alongside Chairman Josep Oliu since September 2007.

The two men worked together in the aftermath of the last financial crisis, snapping up several troubled regional lenders. That slew of acquisitions transformed Sabadell into a major financial player in Spain, focused on lending to small- and medium-sized firms, which make up the bulk of companies in the country.

New Focus

Sabadell said after the breakdown of talks with BBVA that it would shift its focus to developing its retail business in Spain and will analyze with its advisers “alternative strategies” for its international assets, including the U.K. business. TSB has proved a drag on Sabadell earnings ever since it was purchased in 2015 shortly before the Brexit vote. A poorly-managed merger of technology platforms proved costly for the bank.

In October, Sabadell announced plans to cut as many as 2,000 jobs in Spain. The bank has reached an agreement with unions to cut 1,800 jobs.

Sabadell has been working with Goldman Sachs Group Inc. on a range of strategic options that could include a merger, asset disposals or buying a smaller competitor, Bloomberg News has reported. It’s also weighing the sale of its business in Mexico, people with knowledge of the matter have said.

©2020 Bloomberg L.P.

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