SPANISH banking giant Banco Bilbao Vizcaya Argentaria (BBVA) has written to smaller domestic rival Banco Sabadell saying that it would not raise its offer for a merger, which Sabadell rejected earlier this week.

BBVA's executive chair Carlos Torres told Sabadell on 5 May that the bank had "no room to improve its economic terms" for a roughly €12bn (£10.3bn) all-share merger proposal it made last Tuesday, according to a stock market filing by Sabadell.

A combination of Spain's second and fourth-largest banks would boast 100m customers worldwide and total assets of more than £858bn - second only to Santander, the eurozone's biggest lender.

Sabadell, which owns British high street bank TSB, rejected BBVA's offer on Monday, arguing that the proposal undervalued the bank's potential.

Torres said: "The situation absolutely prevents us from being able to pay more premium than we are already offering, because if we were to do so it is foreseeable that our value would fall again (even by an amount higher than the premium increase we would make)."

(c) 2024 City A.M., source Newspaper