What are the consequences of bank mergers for customers?

21/09/2020

Like any other business, a bank can merge or be bought or sold. The headlines are currently dominated by the negotiations for the merger of CaixaBank and Bankia, but in the recent past there have been many others.

Mergers can have practical implications for everyday dealings with the bank — commercial networks might be reorganised and customers reassigned in areas where branches overlap —, but these circumstances do not automatically entail changes in the terms and conditions of customers’ products.

For example, in the case of mortgages or personal loans or of other fixed-term products, the terms and conditions agreed cannot change. This means that customers will continue to pay the same instalments they would have paid the bank they took out the product with in the first place.

If, on the other hand, the customer is the holder of an indefinite-duration or automatically renewable product, such as an account or a card, the terms and conditions could be changed by the new bank. This is not necessarily a consequence of the merger or corporate changes. Remember: all banks can change the terms and conditions of this type of product over its life cycle.

Of course, such changes must follow certain rules. If the change in the terms and conditions is not favourable to the customer (for example, if a fee is increased), the bank will have to give sufficient notice. If, as customers, we are not satisfied, we can cancel the account at no cost, before the change takes effect.