UPDATE 1-Spanish banks face antitrust investigation into COVID loan marketing

(Adds Caixabank, Sabadell reactions, pre ICO complaints, background)

MADRID, June 16 (Reuters) – Spain’s competition watchdog is investigating possible anti-competitive practices by Banco Sabadell, Santander, Caixabank and Bankia in marketing state-backed coronavirus loans.

The CNMC said in a statement on Wednesday that it had opened disciplinary proceedings against the banks for alleged irregularities involving state-guaranteed lines of credit to help businesses and households weather the COVID crisis.

Its action opens a maximum period of 18 months for the investigation and resolution of the case.

Last year, the government approved up to 100 billion euros ($ 121 billion) of ICO liquidity lines, where Spain guaranteed up to 80% of loans. These were channeled through banks to small and medium-sized businesses and the self-employed.

The CNMC said it is investigating whether banks have required customers to purchase financial products as a prerequisite for obtaining these loans.

Santander said it has complied with regulations governing ICO lending and has not made funding guaranteed by ICO conditional on any product or service. Sabadell said he would provide all the evidence to prove his good behavior.

Caixabank, which finalized the acquisition of Bankia at the end of March, said it was not expecting any sanction from the CNMC after providing additional information on the subject.

After complaints from businesses and self-employed workers, the Spanish government specifically banned banks in April 2020 from conditioning loans to other services or products.

By the end of 2020, Spain’s public credit agency ICO had received around 900 marketing claims relating to state loans, which represented 0.1% of the nearly 950,000 transactions it had approved, a source said. close to the file.

The CNMC said it was also analyzing whether the loans were being used to restructure pre-existing financial debts.

This would constitute a violation of the purpose of the lines of credit, as the support was conditioned on meeting the liquidity needs directly linked to the impact of the pandemic.

“The actions of the banks under investigation differ from the good faith required in their relations with customers,” CNMC said.

Their practices could have altered the economic behavior of consumers who turned to banks for ICO loans, he said, adding that it could have distorted free competition and affected the public interest. ($ 1 = 0.8245 euros) (Reporting by Jesús Aguado; Editing by Jan Harvey and Alexander Smith)

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