Hello, good morning, and welcome to this presentation concerning the merger agreement that was reached last night between CaixaBank and Bankia. Presenting today is the Executive Chairman of Bankia, Mr. Jose Ignacio Goya Golzari on the Chief Executive Officer of CaixaBank, Mr. Gonzalo Gortazar. In terms of timing for the presentation, please note that we plan to spend an estimated 40, 45 minutes for the presentation and after that, another 45 minutes for live Q and A for a maximum allotted time of 1.5 hours.
And that you should have received via the e mail invitation. Let me just end by saying that the IR teams of both banks or at your full disposal after this event. And without further ado, let me hand it over to the Executive Chairman of Bankia, Mr. Goyer Bolzari. Thank
you, and good morning to everybody. For us, it's a very important day, so thank you very much for your attendance. We are going to structure our presentation in 3 parts. I'm going to present the first one about the strategic rationale. And afterwards, Juanfaldo Cortazar is going to develop the analysis of the transaction that we are proposing today and of course, the conclusion as well.
Well, I would like to start saying that if I had to define three points that are very important for the in Spanish and European Banking System. Now I think that these three subjects is first, the strategic challenge that we are having. For years, we have been saying that there is that we are in a sector that we are facing important a very important strategic challenges due to the combination of technology revolution and the changes in our clients' at it. That is bringing about, 1st, a reduction of the entry barriers and second, the entrance of new players that are trying to disrupt the status quo. And the third consequence is that banks, The banking industry has to invest heavily in technology.
That's the first point that I believe that is very, very relevant. The second point is that during this year, as you know, the banking sector is delivering very low returns, returns below the cost of capital. And that's very related to the evolution of the interest rates. We are in the negative with negative interest rates since early 2016. And as you can see and as you know, we are going to continue in this situation for a long period of time.
And the third point, of course, is the environment is becoming more and more complex due to the crisis caused by the pandemia at least to a very tough environment. So we believe that we are in a disruptive moment. And in this practice moment, we think that it's necessary to take decisions. It's necessary to react. And for that, anticipation is key because anticipation gives you more optionality, 1st.
And second, anticipation allows you to carry out integration from a stronger position. Anticipation in the consolidation process, but anticipation in the consolidation process with a clear objective. We want to build up a bank with scale, big scale, strong financials and great profitability. We need scale in order to improve efficiency and in order to reinforce the capacity to invest in technology and innovation. Of course, we are looking for a strong bank with prudent provision levels and with solid capital ratio.
And of course, as well, we need profitability. Profitability coming from an income diversification, which is the best way for improving the capacity of generating revenues and having a balanced portfolio mix. And all these things are important. Of course, they are. But at the same time and on top of that, In order to minimize the integration risk, the implementation risk, I believe that it's very important to share value.
And it's my opinion and it's my idea is that we have a common values in this case. And to have common values is very, very relevant. And why do we have common values? We have common values because we have origins that are very close related to the saving banks. I would like to emphasize that these three characteristics our goal in this transaction.
1st, the merger of Caixabanca and Bancia is going to achieve an important critical mass. We are going to rise the domestic leader, as you can see in the slide. Our Market share is going to be between 25% 24% in loans on deposits. And I would like to emphasize that this Percentage is very similar to the percentage that leader banks have in other countries, as you can see in the right part of the slide, RAB 1 with 33 or credit I recall with 29. This critical mass, at the end, has an objective.
The objective is to serve a large client base, a large client base because we are going to have 20,000,000 clients in Spain. And in order to treat and to manage these clients. Both banks have a very strong distribution model, very strong distribution model in which I would like to emphasize 3 points. The first point, we are going to have the most diversified commercial network in Spain. 2nd, and I believe That is very important and we give a great importance.
We are going to have a local knowledge because we are going to be in more than to 2,200 towns. And in fact, we are very we have a focus, a very clear objective about financial inclusion. And that's the reason why we are and we are going to keep our presence in more than 2 90 towns in which we are the only bank. But this traditional, if you wish, distribution model is combined with best in class digital capabilities coming from both banks. And in fact, now we have 10,000,000 more than 10,000,000 digital clients.
In fact, both Caixabanks and Bancia are rated among the 3 best in the country according to independent agencies. So first, critical mass. 2nd, I was talking about to have a solid balance sheet. And from this point of view, you can see in this slide and Afterwards, Gonzalo is going to analyze it. You can see the asset quality that we are offering.
We are talking about a 4.1 NPL ratio with a very extremely strong coverage of 64%. And that is true from the point of view of asset quality, it's true as well from the point of view of solvency. And here, we are presenting fully loaded at the end of Q1 of next year of 11.6%, which is comfortable if you compare this with the regulatory requirements. At the end, we are having a comfortable manager buffer above 300 points. So the second point, solid balance sheet.
The third, The capability in order to generate sustainability from the point of view of profitability. Here, I think that there are a couple of things that are important and that afterwards, Gonzalo is going to analyze it. The first consideration is that profitability in this new environment is about revenue diversification. And I believe that it's extremely important to say that this franchise is going to have important market share in products or in activities that give us commissions. And I'm talking about payment system or mutual funds, but especially, I'm talking about long term savings and insurance capability, where the strength of Caixa is much more important than the strength of Bankia.
And we believe that from this point of view, we are going to generate in new revenues based on the customer base of Bankia. We are talking, as you can see there and we'll follow after Afterwards, I'm going to analyze. We are talking about €290,000,000 of revenue synergies in a period of 5 years. If we go from revenues to cost, our objective is to have a reduction in terms of cost at annual cost of €770,000,000 And our idea is to do it in a 3 years period. Combining all these things, we are aiming to a cost to income ratio of something around 48%, 47 0.9% for the year 'twenty two.
And that would give us a RoTE, which is going to be above 8%. So that are the points that Well, we are offering from an industrial point of view. But a transaction must not only make industrial sense, It must also make good financial sense. And here, you have 3 pieces of information. First one is the agreed exchange ratio between the shares of Bankia and Caixabank.
The second is the premium, which is implicit in this exchange ratio, which is for Bankia, 20% if we are referring to the 3rd September 28% if we are referring to the 3 months average. In any case, this operation is going to be very accretive for both shareholders. It's going to be very accretive for the shareholders of Bankia. As you can see, we are expecting for the year 22%, 69%, but it's going to be very accretive as well for the shareholders of Caixa, as you were saying, accretion of 28%. All this combination give us A solid and balanced structure from the point of view of the shareholding.
Here, you have two pieces of information. The first one is about the split between the current shareholders of Bankia and Caixabank in the new entity. Bankia would have the shareholders of Bankia would have 25.8% and Caixa Bank would have 74.2 Talking about the characteristics of these shareholders, you can see there that criteria is going to have a stake of 30%. The FRO, the Spanish government is going to have 16%, 16.1% and the rest is going to be divided between institutional and retail. So I think that we have a balanced structure between core, institutional and more than 750,000 retail shareholders.
But having said that, one of the elements that I believe that is especially important is the corporate governance. Excellent corporate governance, in my opinion, has been always my opinion, is a must in order to have a sustainable project. And from this point of view, you can see the composition of our Board. We are going to have 15 directors, 5 coming from Bankia, 10 coming from Caixa. And on your right, you can see the breakdown of these directors by category.
We are going to have 3 proprietaries, 2 coming from criteria and 1 coming from fraud, 2 executive and 9 independent. I think that it's very important to highlight that 60% of our Board is going to be composed by independent members. And from the point of view of the woman, they are going to be 33% of the Board. I would like to highlight 2 things. 1st, the majority of independent members are members who are highly reputable, And all of them had a tremendous experience in different boards or different activities and, of course, in the banking activity.
The second question that I would like to highlight as well is that we are a very professional and independent team, a team, a management team that, on the other hand, has a tremendous experience in the curation process. Having said that, I would like to add that the bank will maintain Caixabank as a group brand. The corporate headquarters will remain in Valencia, and we will have 2 operating centers, 1 in Barcelona and the other one in Madrid. But in order to finalize with my the part of my presentation, I would like to go again in order to talk about share values. I was saying that for me to share Values and to share a common culture is very important in order to reduce the integration risk that any merger has.
And from this point of view, I believe that both Caixa and Banca, we have a share We share values, and we share a culture very strongly. And as I said before, I think that that's due to the origins of both institutions. Our objective is to create value for our stakeholders. And in order to that, our objective is serving our customers, their needs and their demands must that must continue to be our purpose. Our principal target should be to have the highest level of satisfaction in our customers.
But that is not possible. That's just impossible without a strong commitment in our team. Our employees in this project, we have new opportunities for professional growth within a strictly meritocratic culture. Having said that, For a project, in order to be sustainable, a project has to be profitable. And that's why creating shareholder value is a must for all of us.
And this merger is the best demonstration of that. And finally, all of that has to have a clear social character. The management team, of course, but the shareholders as well, have a clear purpose of contributing to achieve a society more inclusive, fair and sustainable. And that's the objective and that's the translation of this concept of creation of creating value for our stakeholders. And nothing more from my part.
Well, good morning, everybody. Thank you as well for your time, and thank you, Jose Ignacio. I'll try and go through the rest of the presentation. Some of it is very well known by now in terms of the transaction. The exchange ratio you have seen, I would emphasize that we have spent almost 3 weeks performing due diligence, Reciprocal due diligence that has been completed in a satisfactory manner and that obviously, We still have just an announcement with a merger project that has been signed and agreed yesterday, but it is still subject to approval by general meetings and obviously regulatory approvals.
2 most important is from the in Ministry of Economic Affairs in Spain, and that has to come previous report from the ECB and from Bank of Spain and then the competition authority, the Spanish competition authority, which would be competent for this decision. We expect the closing to be in the Q1 of next year. And with respect to the price and premium, Jose Ignacio has already mentioned it. So I will move ahead. Just some basic data on the size of the new bank.
You obviously can get to that by just adding our numbers. On some market shares, you see most relevant deposit and credits were around that 25% level, slightly higher in mortgages and slightly below in business lending, consumer lending, but overall more sort of around that 25% number. One exception in long term savings, which, as you know, we define as mutual funds, pension funds and insurance. And that on that front, we are at 29%. And as you well know, that is the high value added part on the customer fund side.
This is a great opportunity. I would say a unique opportunity. Certainly, it's my belief is the best transaction we could do. So that makes me very happy that we've got to this point because there's substantial value to be created. First, There are significant opportunities in the area of revenues.
And I know very often, it's a bit more difficult to Give us credit or give credit to institutions that merge for revenue synergies. I would argue this is a special case, and I will want to elaborate on it during the on Taysen. This is one of the pillars of this transaction. We have, as you see, Quantify EUR 215,000,000 of additional revenues by 2025. So it's a 5 year period.
Obviously, it will take some time. This is mostly our long term savings insurance bank, assurance capability applied to a much larger customer base. And there's also an element that as a result of this transaction, we are going to have to renegotiate the existing Insurance agreements that Bankia has because they would be non compatible with those of Caixibank. And as a result, we expect to end up only in 100% of the business. And obviously, as Bankia now owns 49% of this life insurance, by going up to 100% as additional revenues.
We have and you will see it later. We have included in the capital impact, obviously, the impact of these renegotiations. And hence, we also Have to include this additional revenue stream, which I would say is hard numbers because they exist already. These are €75,000,000 So if you add 1 on the other, we're talking about €290,000,000 which is obviously a very relevant number focused on these two areas. Then there's the rest of the bank where these states we're expecting to be neutral.
We see many areas where we can do more, But we also recognize there will be some revenue attrition. So that's the first revenue synergies. 2nd is obviously cost savings. There's a big overlap between 2 institutions. And the rationale of this transaction includes making sure we to optimize our operations.
We have estimated at least EUR 770,000,000 of these cost savings. I'll elaborate on those later on in the presentation. But what you can see is because this business has excess capital, and I have to say, particularly Bankia with very high levels. What we are being able is to put that capital, that excess capital to work in a very efficient manner by investing in business, investing in making it more efficient, more competitive and more profitable. So So we'll see that we can actually afford to cover all these restructuring charges from an accounting point of view with, obviously, The bad will, that's, I would say, the least relevant, even if sometimes makes headlines.
But from a capital point of view, which is very important, The excess capital of the combined group allows us to take that heat and still stay appropriately capitalized without needing any sort of capital Reinforcement. Asset quality improves as well, particularly in terms of provisioning levels because we will Obviously, we also used that capital to increase provisioning levels following the accounting principles that are associated to M and A transactions. Solvency, I was referring, we are modifying our solvency target as a result of this transaction to reflect or what has happened. And we are saying that our ambition, our target is to have an excess over the MDA, so a management buffer of 250 to 300 basis points. I think this is something that gives us Plenty of room to be very well capitalized.
This buffer is expressed in terms of the actual in the CET1 ratio. And while we have these small boosts from the IFRS 9 transitional adjustment, We're also saying that in any case, on a fully loaded and without including the IFRS 9 transitional adjustment, We want to say between 11% and 11.5%. As you will see, the numbers that come out from this transaction on a pro form a basis and even in the most acid views Comply with both these criteria so that we are quite confident on starting this sort of this new bank from the right capital strength. Liquidity and MREL are also areas where we feel good. We'll see some further detail later on.
But those are the highlights of where we see the value of revenues, cost optimize capital and then start with a fairly comfortable financial position in these, obviously, very turbulent times. Just a few figures on revenue synergies. And there are 2 areas of revenue synergies. First one is long term savings. And Here, we again, we use pension funds, life insurance and mutual funds that were grouped together.
You see the differences in terms of Percentage of customer funds on the left part of the slide were almost double. And this is mostly concentrated in long term savings, insurance and pensions. Per employee, you see more than double. In mutual funds fees. You see again levels that are double by per employee.
And that also has to do a lot, in this case, with the mix. And I think with our managed portfolio success, there's, I think, quite a lot of Good things to be done in the future. And I can't say it because this is not the first time that happens to us. We've made acquisitions. We've made Bancatifica is a good example.
We've been growing our customer base. And after a few years, we've seen how we have been able to extend our services and our product range to a larger customer base. I will not bore you with more details, but it is clear there's A very significant difference between the two organizations, but we have a similar customer profile. We just own the factories. Our branch network feels the factories and insurance, as any other product, is absolutely core to the offering.
This is a bit more difficult when you have different partners. So with time, I feel we have a great opportunity, and Jose Ignacio has long experience on this, also feels that way. We have quantified this at 135,000,000 Again, this is a number after 5 years. 2025, we're being modest. There were higher numbers.
I think we can get there, hopefully more, but it will take some time because obviously, the first couple of years are going to be very focused on integrating Systems, the branches, cost base and then gradually developing sort of the commercial strategy. But certainly, quite a lot of value coming from here. On the other side is the protection insurance, where we include, as you know, life risk and non life. And I would say it's a similar story in terms of percentage of clients that have these products. We have much higher penetration.
Again, the fact that we own the factories and that it has been going on for decades at this stage give us a great traction. And I'm convinced because we have a great partner now in Mancay. I'm convinced that with time, There will be the similar levels. You see market shares that have grown for us. This is a decade, so it's a long time, but We've almost doubled market share in Non Life, and we've grown by 50% market share in Life risk.
This is what we have achieved within Caixabank, And there's no reason why we will not do this for the larger group. We have estimated here EUR 80,000,000 sorry, not $800,000,000 $80,000,000 of additional synergies. In both cases, we're not Presenting the highest number, we have a range and we have gone to the lower part of the range to make sure we actually deliver on these numbers. We want to do it. Just to remind you, last time we talked about revenue synergies is when we acquired BPI in Portugal, And we actually ended up delivering 50% more than what we had announced in terms of what revenue synergies we could achieve.
And to be honest, the story is not finished. We're still doing a lot of new things in with BPI in Portugal. They're obviously very different situations, but gives you an indication that revenue synergies exist. They are not a myth. They exist and they take place.
And this is the final part. I'm putting all together on the right hand side. You have this $75,000,000 that we estimate from the exit and the renegotiation of The life insurance agreements of Bankia. So from that, we're going to get $75,000,000 we're going to buy, in this case, dollars 70 €5,000,000 And we put all in context. You see this is a gradual but increasing level of synergy achievement to get to those EUR 290,000,000 again by year 5, 2025.
Excess capital, when we do pro form a Banca and Caixabanca as of June, we get to that 12.77 And here comes what we're using this excess capital on restructuring, euros 2,200,000,000 The adjustments accounting adjustment associated to sort of accounting rules at M and A and other adjustments. And in these other adjustments, we include all the implications from the renegotiation of the insurance agreements, which needs to take place. This combined, you'll see later, is approximately 150 basis points. So it's a big investment, no question. But we will more than recover that investment in the future.
The cost savings, we are going to deliver $770,000,000 This is equivalent to 42% Opankia's cost base from last year. We'll get that fully by 2023, but almost fully by 2022. And I would say next year, it's only a small part. This is associated to the timetable from this transaction that will allow us to do a lot of things by the end of 2021. But in terms of how we see that flowing in the income statement, it's going to be more 2022.
Interestingly, our cost income, and this is obviously an ambition, aspirational because we're looking at our cost income last year. We were very close at $55,000,000 And then we say, well, if we had delivered last year all the revenue and cost synergies, Then we actually will have reduced cost income by almost 8 percentage points to 47.9%, which is obviously a number that is well below our peers in Spain and and our peers in Europe. This is where this is the potential of this transaction. This is what we're going to work for, And we're not saying it's easy, and we're not saying it's going to be achieved in a very short term. But certainly, that potential exists, and that is going to be the light at which we look when we go ahead over the next years.
Restructuring charges, which I mentioned before, equivalent to $2,900,000 or $2,860,000 of cost savings. Obviously, we have calculated this with Kerry. You know that restructuring in Spain is expensive, but that is still very Good investment for the reinforcement of the bank. And on top of this, we obviously have both Isituzo had quite the strict cost saving initiatives, which we are not going to obviously let go. So cost and Cost savings are going to be a key driver for us in the next years.
Just to remind you, you know this well, I believe, but This is not the first time either us or Bankia gets involved in an integration. And we have actually delivered, I would Highlight two things is very fast IT integration, very fast. And second, we have actually achieved cost savings very high and above those that were originally announced. So we feel good. We think we can execute.
We know it's not easy. We know it's a big effort. We know the pitfalls, but we have the teams and certainly the willingness and the ability to deliver on this, which will be obviously more complex because it is larger than many other transactions. Asset quality, Jose Ignacio mentioned it, will still, out of the top 4 in Spain, will have the lowest NPL, 1 of the highest loan loss coverage also from a nonperforming asset. We think we are well placed.
Obviously, this is a priority, whether there was a transaction or not, fighting against the expected increase in Nonperforming loans and problems associated to the economic crisis is a key priority. I have to say, We're now in mid September, the summer months and up to September for both organizations on this point of view has been quite good. So But obviously, we all know that the next quarters will be critical. I'll spend some time on this detailed and very relevant slide. This is various impacts on capital.
From left to right, I mentioned before that 12.8% of the pro form a We are adding because we're expecting the transaction to close in the Q1. We're adding the impact to the Comercia Merchant Acquiring Business transaction that we did we announced last quarter. This is 13 basis points. We were moving from 49% to 20 percent ownership. The regulatory impacts of 10 basis points, and here, I actually see that the notes on this page are very relevant.
So I encourage you to, as always, make sure you read them because here, we are including or what is coming in terms of both regulatory changes, the model rollout for Bankia, the TRIM impacts mostly for CaixaBank, all the net of this is an additional 10 basis points. And then some Capital creation, organic generation for the next 3 quarters, 14 basis points. This is based on what the market is estimating, so we haven't come up with any The strong number. That gives us 13.1%. This is the pro form a in March.
And then we take the hit that I was mentioning before, 150 basis points where we had the restructuring cost, the expected loss and other adjustments that are made both at the time of acquisition and also as a result of the renegotiation of insurance agreements and others. All together, EUR 150,000,000. I have to say, All this is not going to take place exactly on March 31. So this will be taking place some of it, yes. All that will be taking place during 2021.
But we wanted to present here the most asset view so that you see that even with the most asset view, The capital position works well. We get to 11.6%. And then on the bottom, you are looking at what The numbers are without IFRS 9 transitional. You see that 11.3 as the pro form a. Again, It's not going to actually happen because many of these adjustments, out of 150 basis points, will not happen in March.
Some of them will happen in June and some others in the second half. And by the end of 2021, when all this would have happened, we will then have added more capital created during 2021. So the actual number is going to be higher. But even on a pro form a basis, we are well within our range of 11% to 11.5 percent ex IFRS 9 and with a management buffer that exceeds that range of 2.50 300 basis points. Obviously, this is critical for us and being able to do this and taking this 150 basis point charge without needing to restore to resort to other capital measures is something that makes all of us Very happy and also very comfortable on this transaction.
Liquidity, I won't spend too much time. Both banks are very well in terms of liquidity. And hence, the combined bank, no surprises, actually complying and more than complying with our liquidity with a very large in Buffalo. From an MREL point of view, we had our MREL to 22.55, and that's the pro form a combined entity. And you see that is very close, slightly below the likely sort of average of MREL requirement.
In any case, there will be a new cycle and other MREL decisions will have to be taken now considering a longer period, this transitional period from BFRD2. But you see the gap is fairly small. And The activity that we have had, you see the issuance that both banks combined have done in the markets for the last three and a half years, where we have obviously Been very active and have plenty of market access to, without any disruption, gradually cover that MREL gap. As you know, we want to Mostly use subordinated instruments for MREL. And for the buffer over the requirement, We will consider and use some non subordinated instruments.
Few numbers on the earnings accretion for both Bankia and Caixabank shareholders. I'll focus on Caixabank. We see a 28% Christian for 2022. Obviously, again, this is based on market consensus and then adding the impacts associated from this transaction cost, which by 2022 are achieved at 90% level, revenues which are only partially achieved, so limited impact there and also a lower cost of risk associated to the cleaning that is done because of the accounting principle at the beginning of the transaction. Similar big increase in return on tangible Coutee.
Again, this is not our target for this year. We're just at this stage showing what's the market's view and adding the impacts of this transaction. Each and one of you will have your own view on what we can achieve by the end. Timetable, I think we have discussed. We still have to Get this transaction through the shareholders meeting.
Obviously, they are the ones that will need to decide on these on these terms. We expect that to happen sometime in November, around mid November. And then the regulatory authorizations will take time. I expect the merger to be closing by the end of Q1. If we can close earlier, we will do.
Obviously, it's in the interest of everyone. But these things, as you know, take their time. So that's really all. In summary, we're creating reinforcing a leadership position with sort of 25% average market share with over $1,000,000,000 of per annum and synergies, cost and revenues, Fantastic. Bank and Sewerne's extension of the franchise, optimizing capital and obviously all that results in a high value creation for all shareholders.
And finally, this is a merger. All mergers incorporate execution risk. I think Both, as Jose Ignacio was saying, the fact that we have shared values, we know the way to do banking and we do it in a similar manner and that we have done quite a few transactions that have been executed, I would say, very, very well. It gives us a lot of confidence. So thank you very much.
And obviously, now we are ready for questions, if there are any.
Thank you, Gonzalo and Jose Ignacio. Let's Move now to the Q and A session. Operator, can you please go ahead with the first question specifying the name and company of the caller? And let me just remind the callers to keep your questions as brief as possible because we do have understandably a big queue today. So go ahead, operator.
Thank you. Your first question comes from Ignacio Laguerre from Exane. Please go ahead.
Thanks very much. Thanks for the presentation and I just have 2. The first one is taking into consideration the comments that you make on follow on the The fact that the EUR 11,300,000 is the most asset view. I mean, just could you elaborate a bit on how the restructuring charges are going to be phased in? And how do you think The restructuring of the bank is going to be completed in terms of whether you think it's are you going to stop first the network or the central services?
The second question is more on the revenue synergies. Just wanted to understand better what do you expect in terms of revenue losses? I reckon the relative strength of Caixabank's current selling capabilities. And
I think
it was very clear in the presentation, but what should we expect in terms of revenue losses from the Thank you.
Thank you very much. In terms of The restructuring costs, obviously, when we close the transaction, let's assume we close at the end of March, Some of these restructuring costs, if I may, some of these $150,000,000,000 will be automatic because all that relates to adjustments to the accounts and fair value accounting, obviously, will happen by definition on the 1st day. Then there are 2 parts. The cost restructuring, there will be No question, process of negotiation for how do we reduce our overlap, which will be, as we have told in the past, a conversation and a negotiation with our unions That will start after the transaction is closed and will finish when we reach an agreement because we are confident that we will reach an agreement. Hence, it is very unlikely that those costs will be recorded in the Q1, but more likely when an agreement is known and is reached.
So I would say maybe Q2, Q3, we don't But that would be the idea. Some other restructuring costs would include, for instance, writing off some intangible because, for instance, associated to IT because the plan is to migrate Banques IT Systems into Caixabanks. And hence, there will be, by definition, some assets that will be written down. Those will probably or some others where there's an agreement to renegotiate and cancel certain contracts. Those are more likely to be maybe at the beginning of the transaction.
And then there are obviously others related to the renegotiations that we need to do on the insurance front, in particular, and others, and those will take some time as well. So I would say there's a good part of this that will come on the closing, but that's also a pretty relevant part that will heat our capital position during 2021. And it's a bit more difficult, at least I say, to be completely specific for a number of issues. Some we don't know and others because it depends on negotiations that we need to take and that we need to keep for ourselves for the time being. In terms of revenue losses, this is obviously a very relevant question.
We think we're going to have revenue synergies and that revenue attrition will happen, but will be limited and compensated. Think of this as one Transaction between those these two institutions that are obviously is a friendly transaction, those institutions Know well each other and know well how to do these processes. We have learned a lot from the past. We have learned a lot from previous transactions. Our experience in Banque in terms of revenue attrition is that each transaction we've done, revenue attrition has been in terms of customer losses, has been lower.
And particularly, we haven't not lost any significant sort of value added clients in this Actually, you can imagine that you may, in some certain cases, lose clients, but they may have a larger impact on the P and L and other times there will be a lower impact. We are 2 institutions where the retail franchise is predominant and where the corporate franchise is very relevant, but it's not doesn't have the same weight. And hence, the overlap on the loss So revenues from joint clients is going to be much more limited. On the retail side, we're going to obviously reduce the footprint, Move clients from one branch to another. But I have to say, this is what we have been doing for the last 5 years.
We, meaning Caixabanca, Banca, in the context of M and A and out of this context. And certainly, you know our experience has been gaining market share year after year. So we know how to do this. We, as retail banks, have the experience. We have a limited client overlap, estimate around 5%.
And these have been taken into account in terms of the numbers that we've done and being deducted from the revenue synergies that we have. For that reason, we haven't had synergies in payments, synergies in other areas of expertise of both banks and consumer lending because we are offsetting these other synergies with revenue attrition. I spent a lot of time during the presentation on the sources of synergies, so I won't repeat myself. But this is what I would say at this stage on revenue attrition. Obviously, Jose Ignacio has quite a lot of experience on M and A, much more than I may want to compliment O'Radi.
[SPEAKER
MARCO TRONCHETTI PROVERA:] No, I really agree with you. I think
that talking about revenue attrition, there is a very clear thing. The thing has changed dramatically in the last 10 years. 10 years ago, the revenue attrition was a very important thing. It was a very important thing for many reasons, but probably because you had a product which really was the promotion product, which was deposits. Deposits was the way in which you could get new customer because deposit is a direct product.
Nowadays, deposit is not a promotional product anymore. And I would like to share with you one piece of information. A couple of years ago, when we had the integration of Bankia with BMN. This year, the year 2019, We didn't lose any market share. In fact, during the integration process, we increased our market share.
So I think that revenue attrition, which was a very important point, a very important point, many years ago nowadays with the competitive framework that we have in Spain. And with the weapons, the tools that you have in order to get New customers is not going to be as relevant as in the past.
Okay. That's why I hope that answers your question.
Thanks, yes.
Okay. Operator, let's move on to the next one, please.
And this question comes from Francisco
Yes. Thank you very much. So congratulations for the deal, first of all. Two questions for me on revenues and asset quality. On revenues, also you mentioned a large Positive impact on earnings per share from the transaction based on the consensus forecast for 2022, But interest rates have moved lower recently, both the Euribor and the long term yields.
And I wonder what type of NII trajectory are you considering in your business plan? And how comfortable do you feel with the stand alone consensus forecasts? And also a follow-up on the revenue attrition question before, if I may. If you expect any antitrust issues in any region or business for the new bank, which might affected the combined revenue base. Then the second question is about asset quality.
You will have to deal with an uncertain macro environment during the integration process. So I wonder what cost of risk are you assuming for the merged bank over the time horizon of the business plan. If you will use the top up provisions booked in the deal to accelerate the liquidation of NPAs. So we could expect a reduction in the cost of risk trajectory for the merchant bank versus the stand alone. And then in this context, if you can please update on the loan moratorium, how it has evolved during Q3 to date and the transformation ratio into NPLs.
Thank you, Francisco. Maybe I'll start Jose Ignacio. Obviously, you compliment us as you will as we wish. In terms of revenues, we are not at this stage providing updates on NNI trajectory. We will obviously continue because we're going to exist as separate institutions at least until February, March.
We will have the Q3 results presentation, final year end presentations. We have time to give you an update on how Various movements in the market may affect us. At this stage, because obviously, transaction like this It's a lot of work, I have to say, and we wanted to make sure we did it really in an excellent manner. What we have focused is on what are the marginal impacts of this transaction. And that's what we've done, looking at any numbers.
It's also a way to facilitate Not giving inside information, but just saying this is what for this transaction we expect to achieve and comparing consensus with consensus. So there will be time to see that. Obviously, the situation most in terms of also your second question in terms of asset quality. It's still Floyd. We have an economic crisis that is here, but it's going to take some time.
And we'll have to see how what is the scope of the really the depth of the damage. But it is true that what we have seen from our update in late July to now is quite positive. We had, SkaixaBank, a fairly hard scenario where GDP will fall 14% 2020. And I have to say, currently, that looks pretty conservative and that we would still have a recovery next year. But by the end of 2021, we will be 5% below where we were in 2019.
Obviously, on 2021, we still cannot be too confident on what exactly it's going to look like, depends on many things which you know well, but we were based on a fairly hard scenario. We've seen in these 2 months, actually, we have had a reduction of nonperforming loans in July August. More than 90% of our loans subject to moratoria Are now paying totally or partially, mostly partially because they are the mortgages. But the 3 month period of moratoria of Principal and interest has lapsed. And hence, these mortgage loans are now paying Interest and in some cases, interest is a substantial part of the total.
And there, we have, at the end of the last month, only 3% of the moratorium. So 3% of these approximately $10,000,000,000 only 3% I've not paid. They were not yet NPLs because we still obviously have 3 months. But we had certainly position over the summer that is confirmed our view that moratoria does not equal nonperforming loan. I say 97% of those are paying were paying at the end of August.
There's still more to come because there will be the Final phase will imply that consumer lending will start paying in full, and that will mostly be in the Q4, October, November. So It's too early to say, but I have to say the current trajectory is positive. And hence, when you look at cost of risk for 2021, we don't have any guidance. We have guidance for 2020. We had 60 to 90 basis points.
We were confident after July. We are even more confident now that I said Q3 is actually not providing Negative but positive surprises so far. But obviously, after 2020, it will be 2021. And it is too early to say What the cost of risk of the combined institution is going to be. What is mathematic is that the cost of risk is going to be lower than if there was no transaction because we're taking a significant hit to both the credit portfolio and also foreclosed assets associated to merger accounting.
So whatever your assumption is, if it is right, you need to reduce because we are taking the provisions upfront, And hence, that will revert over the next years as we have seen with other acquisitions, BPI, etcetera. And one final thing on loan moratorium. The new requests coming after Public results have been very limited. So there's no longer a fast buildup of more and more moratorium requests.
Paco, I think you did also ask a question about antitrust issues. I don't know if you want to address that, either Jose Ignacio or Jose?
Yes. Well, that's a point that you have to analyze. As As you know, well, you have to file, and we need an authorization coming from the Competence Committee, our Competence Commission. We believe that, well, we are reasonably comfortable. Of course, they have to take the decision.
But our market shares, as you have seen, our market share, which are important. But when you analyze them at a national level, compare very well with other countries. And I think that that's the point. There are here. Two points, if you wish.
1, that the analysis has to be done at a national level, 1st. And second, that we are competing not only with banks, but we are competing, as I was saying before, with big takes, startups and well, and all this new world that you know much better than I do. So well, we have to wait. We have to work in order to show our reasonings. But in any case, we are reasonably comfortable.
Okay. Thank you, Paco. Operator, can we please Move on to the next question.
This question comes from Omar Sarano from Morgan Stanley. Please go ahead.
Good morning. Thanks for taking my questions. I have two follow ups on cost synergies and asset quality. On cost synergies, You've given I think the target was 42% of Bankers cost base equivalent to 42% of Bankers cost base. I seem to remember the Banco Mariner also ended up closer to 50%.
And certainly, the Banco Popular transaction with Santander, that's It's been the target 50%. Could you give us a bit of color of the level of overlap in maybe in branches or how you're going to proceed with the cost synergies And if 50% is something we could look forward to, obviously not today, but is there room to do better is Really what I'm asking for. And second, on asset quality, following from Paco's question, I understand you don't want to give guidance on 2021 going forward. But if you merge certainly in a recessionary environment like we are today, You obviously got to be very, very confident that you're merging with someone with a strong asset quality or resilient asset quality. So can you give us detail of how you came up with the EUR 700,000,000?
What assumption do you make have you made with a EUR 700,000,000 top up in provisions. And if I look at your macro assumptions, both in CaixaBank and Bankia, you're expecting double digit in the case of CaixaBank recovery in 2021. If there's a second lockdown, Things are up in the air, but is there any sensitivity you can give us of that I'm sure you've looked through if The economy was to disappoint. What kind of top ups or disruption to the business plan could it give, maybe sensitivity on provisions on both banks. Thank you.
Thank you, Alvaro. It was very good questions as always. In terms of the cost savings, we have effectively, announced something that is 42%. I have to say This is something that we are confident both teams. We've worked, obviously, together, these synergies, so we have the Luxury, I would say, of having great teams that have done integrations in both places.
We have come up with a plan That is obviously preliminary at this stage, but it's a plan on which we think that we have elements to deliver on. We want to Meet our commitments. And obviously, one of the main commitments that we're taking today is to deliver these synergies. Is there room to do more? Obviously, we will strive to do more.
But I think at this stage, This is where we can put our word and say, yes, we are going to do this, and we're going to do this in this period. Both institutions have a track record where they have over delivered. And certainly, I would like to see myself in a couple of years saying, well, we actually managed to do even more. But our commitment is to do this 42%. I have to say also both institutions and Safa Liberica have We've done great efforts to run a very lean platform with a lot of cost cutting programs that have taken place in the past years.
And that may limit as well the ability for us to Go from substantial above these levels. But if there are opportunities, I'm sure I'm convinced that we will capture them. And obviously, We will update you in due course. There is only a limited number of things that we can do in 3.5 weeks. It's been a very intense period, but certainly, there's always 2 or 3 levels of further detail and analysis that hopefully will allow us to I think of possibility of over delivering here.
With respect to the split of the $700,000,000 at this We are not going to provide that split. You have to also take into account That all these are preliminary figures. The fair value adjustment is going to be fixed in the end when the transaction closes in March. And our experience is that there's always changes. Also, any number that we've done now after 6 months, by definition, because market changes, for instance, because then we have obviously a different environment.
The numbers will not be exactly those. And if there's further detail to be provided of this. It will be in that time. And with respect to the economic recovery, obviously, there's still quite a lot of uncertainty. We are actually operating with scenarios where we have a base scenario, we have a more optimistic case and an adverse scenario.
We have actually weighted all these scenarios in our production. We continue to do so. And obviously, we feel that the combined entity is going to be able to deal with these scenarios in a better manner. We are actually in the process of having an extra $1,000,000,000 of pretax income. We're going to have an extra $1,000,000,000 to fight against tough scenarios, which I think today are not necessarily the ones that will materialize.
So it's, I would say, a transaction that makes for us a lot of sense that obviously, We can deal with the good, the bad and the very bad scenario in a more effective way jointly on a separate basis. And we were discussing yesterday these transactions and in this environment are difficult, How happy we are with the due diligence that we both institutions have done on each other, because we confirm what we thought that we follow very prudent principles. And hence, from that point of view, we're convinced that the deterioration that will happen in terms of asset quality It's going to affect both Bankia and CaixaBank in a smaller manner than it would be in the average of the market. And Getting married in difficult times makes it even more important that you select the right partner, and I have full confidence 100% that We have selected the right partner.
Okay, Alain. Just a reminder, I'm sure you know that the figure you mentioned was post tax. So you'd have to gross that up to get the figure. And also, as Gonzalo said, that this is an estimate at closing. So you obviously have the benefit of provisions that are taken before closing, just for your information.
Moving on to the next question, operator, can we have that one?
This question comes from Mario Romero from Fidentiis. Please go ahead.
Hi, good morning. My first question would be, With the frog sitting on the shareholder structure, would you consider raising your payout ambition somehow once the regulators' leanings are listed? And then the second question is, I know the Basel IV topic is on hold for now, but after the very strong reduction that Banca is obtaining on its mortgage risk weighting, Is it possible to give at this stage an update about the very relevant capital impact indication you have given on this topic? Thank you.
Well, the first one about the fraud. Thank you very much for your question. Well, I think that the fraud has been in the the shareholder structure of Bancia for the last 8 years. I have said many times that they have been, Well, a very good shareholder. I have said and I repeat that during this time, we have not had any sort of political interference.
We have been able to develop a very professional and independent management. And that was in the case in which Frob has 60%, 61% of banking. In the new combination, florbe is going to have a 15%. Of course, they are going to have a seat in the Board, but the influence is different, of course. And second, I am sure that a fraud is going to continue with the same policy.
So I don't see any special interest for the FOB in order to increase or decrease the payout. I am absolutely sure that they are going to behave in a very professional way, and they are going to try to increase the payout when the Capital situation is good and reduced if the capital situation is bad. So I am sure that they are going to continue in a very professional and in a market friendly
way. We also had a question for Mario concerning the regulatory impacts on the transaction. I don't know if you want to address that.
Well, it's I didn't fully understand you, Mario. What's the question, Mario?
The impact regarding Basel IV in the past, you have been giving indication that it would be under 500 basis points, of course, on a stand alone basis. So I was saying that Nada Banker has obtained regulatory approval to decrease risk weighting on mortgages to very low levels. I don't know if you can give at this stage a bit of an update on the future capital impact due to Basel IV.
There are a number of moving pieces, including a position by the French and the German finance ministers that comes with this week. I think this is very much certainly extended in terms of the time frame and a bit still now in evolution. So I would rather not comment at this stage, but I think it is, in any case, moving towards a lower impact and later rather than the other Case, Mario.
Okay. Thank you.
Thank you, Mario. Operator, let's have the next question, please.
This question comes from Stefan Nedialkov from Citigroup.
Good morning. It's Stefan from Citi. Congratulations on your wedding. I have two questions. In terms of the restructuring cost that you're guiding to of 2 point to 1,000,000,000.
Unless I've missed it, could you give us a breakdown of salaries versus non salaries such as IT, decommissioning systems, etcetera, just for us to have an idea of what is being targeted. And the second question, Gonzalo and Jose Ignacio, when you look at your previous roles, what is changing in your new roles in the new entity from day to day operational point of view, communication strategy, etcetera. Is it unchanged? Or is something changing in a more expansive way. Thank you.
Thank you. If I if you allow me to start in terms of restructuring costs, today. The total number includes all the various categories, including personnel, non personnel, general IT, etcetera. At this stage, We have our own estimates. They are preliminary.
But at this stage, we're not going to provide a breakdown, and I apologize for that, Stefan. But there are substantial deliberations and negotiations that we'll have to have in the following year, and we feel It's not the right time to share openly what, in any case, would be only an estimate that's a preliminary estimate because we will need to go through the various phases. And the second question for me personally, obviously, what is going to change is that we will spend a lot of time on the integration. I will spend a lot of time on the integration. I've always said that M and A is a distraction, and it is a distraction from the point of view that You need to devote time to things that are not running the ordinary business.
The big difference in this case is the distraction is worth the effort and by quite a margin. So it's a blessed distraction because there's $1,000,000,000 of value to be created per annum. And hence, that will be certainly a focus for me in the next couple of years. Fortunately, we know how to run an organization and new transactions at the same time, both. So it doesn't mean that we're going to be diverting the focus from clients.
That's been my key message to the workforce this morning. Remember to focus on client, client service. Let's not get distracted. This is a critical success of any transaction reached. Because we will deliver on the synergies, I have no doubt.
But obviously, for me personally, I will be spending The time on this will be my main task.
Yes. From my point of view, well, For me, it's a very important change. I mean, in fact, there are a couple of considerations here. 1st, Of course, we all in the new in the bank, we are going to be very focused on integration. But in my particular case, I believe that I'm going to devote much more time to the board that I used to due to the change of my of the profile of my position.
And I think that that's very important. It's very important in the integration process. But I would like to take the possibility to refer to the Board. And I would like to emphasize, and I suppose that you have considered, that The structure of our Board of Directors is a very, very friendly market friendly structure. I'm very happy with the structure of our Board.
And I'm very happy about the people who are Conforming this war, I'm very happy with the members of the Board. If you analyze the curricula of the different People who are there, all of them are very professional. All of them have a tremendous experience. And all of them, and for me, that is very important, are very independent.
Okay. Thank you very much, Stefan. I hope that answers your question. In the meantime, operator, can we move on to the next one, please?
Your next question comes from Adrian Cighi from Credit Suisse. Please go ahead.
Hi, there. This is Adrian Chigi from Credit Suisse. Thank you for taking my question. Two questions from my side, one on capital and one on RoTE targets, Please. So you've outlined the 250 basis points to 300 basis points of capital buffer target.
But how do you think of capital returns of the combined entity. Is it fair to think that the minimum 50% from the business plan will be maintained? And the RoTE target, you referred to the 8% ROT for the pro form a entity. But are you still aiming for a double digit as outlined in the latest previous plan? Or is that completely outdated given the current interest rate outlook.
Thank you.
Thank you very much. On the first one, you're really looking at dividend policy. And obviously, we at Caixabat have a dividend of policy of over 50%, which we actually suspended for 2021 and actually also for 2020 when we reduced our dividend in light of the exceptional circumstances affecting the economy and also in light of the Recommendations that I have come from the ECB. For this year 2020, we are Expecting to pay up to 30% at Caixabank. It is likely that the transaction will have closed by the time that the Dividend is paid and the way the merger agreements work, whatever we decide to pay will be obviously extended to Bankia shareholders that will have received Caixabank shares by that time.
So this is still the case. I remind you that we're still accruing for 43% this year because of the rule that the ECB is asking us to follow, but the intention is not to exceed 30%. I think this bank, as it's going to make $1,000,000,000 more in pretax, obviously, is going to be paying more dividends than if there was no transaction, both Caixabank and Banca. There's no question with respect to what happened in 2021. 2021 is going to be a special year, and I would like to Wait until we have the new Board officially working together, which obviously is going to happen once the transaction closes, so that the new Board takes a decision.
But Because we're going to have the impact of bad will and all these restructuring costs, the net income for 2021 is not going to be a good base to calculate a payout on. And obviously, we'll have to wait for a new board. And also by the time we have a new board, it would be March or so. Hopefully, there will be also some more clarity on what is the real impact of what's happening in cost of risk, etcetera, etcetera. But the Ambition to retain a high dividend.
And in fact, the fact that this transaction will allow us to pay more dividends is unquestionable. Return on tangible equity, as I said, is not a target. At this stage, we are not I don't think we should be setting targets. We need some more time to develop a mid- to long term scenario. We probably need a bit more time to understand what is going to happen in the next 2 or 3 quarters to the economy and asset quality.
The feeling so far is much better than what we have, but I think we still have to wait because there's plenty of things that are still in the future. And I think in due course, we will come out possibly with return on tangible equity targets that we can deliver. Does it satisfy to me to be below Double digits? Certainly, no. But at this stage, I think we need to be prudent and wait to do the analysis properly.
Thank you, Gonzalo. Adrian, I hope that answers your question. Operator, let's move on to the next one, please.
This question comes from Darragh Quinn from KBW. Please go ahead.
Hi, good morning. Thank you for taking my questions. Just to revisit the capital targets, I mean, the buffer you're looking to hold is kind of slightly or is lower than the buffer that CaixaBank is currently running with. I just want to try and understand you. Did you contemplate potentially reinforcing capital as part of this transaction?
Or is it you're confident enough in the economic outlook and ability to generate capital organically that you're willing to lower slightly the capital buffers of the new versus the previous position. And then secondly, just as well to revisit The fraud position in the new bank. In the past and in other countries, government ownership has been to more of an arm's length situation and now actually taking a seat on the board Inevitably, we'll lead some people to assume there could be more political interference. I guess just what would be your answer to that? And does the government taking aboard fees imply any changes to its position in terms of selling down its stake ultimately?
Or is this an indication of a willingness to be more of a permanent shareholder.
Well, if I may answer the first and I'm sure Jose and Arthur will answer better the second. We have not contemplated a capital reinforcement. We've obviously run the numbers. When you ran the numbers, one of the very important critical points is how all this merger accounting affects capital. And because, a, the adjustment to the balance sheet is moderate and b, because of our good capital levels in our case and obviously, clear excess as capital in the case of Bankia.
We can afford to do this without any raising any capital one way or the other. We are confident, obviously, at the same time, the world changes. So we'll have to see how things evolve in the next 12, 24 months. But clearly, what we have created is very resilient and can withstand the current environment. And hence, we are not going to raise capital as a consequence of this transaction and feel good about it.
We don't feel That this is a problem, quite the opposite. It's an opportunity to put to use capital that was otherwise somewhat trapped in the current environment to put it to use in very good sort of returns on investment.
Okay. Talking thank you for the question about defraud. Talking about the FROB, well, we have to take into consideration the change of the position that FROB used to have now currently in Bankia and is going to have in the new operation. Now FRO has not, as you know and as you said, has not any board position in Bankia. Well, for one reason, which is very clear.
They have 61% of the capital. And so they can decide in the shareholder agreement. Due to the beginning of our when we joined Tubancia, that was a clear idea. I mean, it was important to launch a message to the society that Bankia was going to be managed by professionals and in an independent way. And in order to emphasize this message and in order to emphasize This idea, Frogg decided that they were not going to be in the board.
But in any case, Frogg had the real control of the society because they have 61% of the vote. In the new situation, the FROB is in a different position. First, they go from 61% to 16%. 2nd, they are not the first shareholder anymore is criteria. And so their role is changing clearly.
So they have decided, and I understand very well, that well, his position has changed, and it would be good for them to be more involved in the Board of the New Society. They are going to have is through one seat, 1 out of 15, and well, which is important to consider that. And in any case, I'm sure that they are going to continue with the position that they have had in the past, A very clear market friendly policy on the one hand and on the other hand, very professional and looking for the shareholder value. I don't have any doubt about that because they are aligned with the rest of the shareholders. We want to create shareholder value for them, of course.
Thank you, Jose Ignacio. Thank you, Dara. Operator, let's move on to the next question please.
Your next question comes from Andrea Filtri from Mediobanca. Please go ahead.
Thank you for taking my question and good morning. Three questions, very brief ones. Capital, shareholder remuneration and governance. On capital, what is the position towards the Telefonica and Erste Bank stakes? And what future regulatory swing 1st leg Basel IV, are you taking into consideration, please?
On shareholder remuneration, President Gorrik Osari, Bankia has committed to EUR 2,500,000,000 capital return to shareholders in the business plan from the excess capital accumulated, Which was just reinforced by the ECB approval of IRBA models on mortgages that freed up 160 basis points this week. What can shareholders of the new entity expect on the dividend policy and on capital return, please? And on governance, could you please detail what will be the split of executive mandates between Chairman and CEO of the new entity? And will core shareholders have any lockup period, please? Thank you.
I can start with a couple of them at least because some of them You've addressed to Jose Ignacio. So, in California, I asked you there's no change in our position. But obviously, we will have a new board with onethree of new board members in 6 months. And the new board will have to look at, obviously, our strategy and see if any changes are not appropriate. But at this stage, there is no change on that point of view.
The question on dividend policy, I made some comments before and it's more addressed to you, Jose Ignacio, and then we can comment on the other As it
was. Okay. Well, talking about the well, you are talking and thank you, first of all, thank you for your question. Isu in our strategic plan when we launched it, the strategic plan from the year 'seventeen to the year 'twenty. We were we had an objective, and the objective was to distribute to our shareholders the excess over the 12% of CET1, and that was the idea.
And in order to distribute something, the first thing that you have to do is to create it. And the reality is now we have created this 2,500 EUR 1,000,000 of excess capital over CET1. As you know, we finish in June. We say capital, in our case, of 13.68 percent and the IRB mortgage model and the approval from the ECB gave us another 160 basis points. I am talking about the bank, JAS Bank.
So we have created, in fact, in excess over the 12% of CET1 of more than €2,500,000,000 In fact, we have created close to €2,700,000,000 By this creation of capital that we have in our balance sheet It's a creation of capital that due to regulatory restriction and current economic situation really prevents Bankia from distributing this excess of capital. And the question here is that the market Clearly, have reduced the premium that historically allocated to this excess of capital, probably because of the regulatory in the Revolta Lageratorex scenario. And as a consequence, for us, it was very important and is very important to deploy this excess of capital. And the best way of deploying this excess of capital, we thought and we think, and you have seen the figures, is to invest this capital, invest our capital in this merger. Other alternatives are much worse for the shareholders that this alternative.
And talking about the dividend policy, well, of course, and as Gonzalo has said, We are going to continue with our dividend policy in Bankia because I suppose that we are not going to finish the merger before the end of the current year. And What are we going to do with the dividend? Well, it will depend of what our Board decides. So far, we have not no, no, so far, we have not had any decision about that. We have time in order to take this decision.
And talking about the split between ourselves. Well, I'm going to give my vision. And if you want to complain, Gonzalo, of course. Well, in order to talk about the split, the first thing that I would like to say is that it has not been a problem in our discussions because we'll reach an agreement in one day. So that's the first thing that I would like to emphasize.
The second theme is that I met Juanfaro many years ago, and we have been working together for many years. With this consideration, I would like to give you the rationale as I see in the split of the different franchise. I have many, many integration process, many mergers, many very that had a very happy finish and other not so happy. And one of the things that I have learned and I have learned very, very, very clearly is that in a merger, you need a very clear line of command. It's very, very important that everybody knows who is in charge of the management team.
And that's the reason why We decided to have a CEO who is going to be the 1st executive of the company and who is going to lead the management committee. And it's very important to say that, and I would like to emphasize that. But at the same time, in any integration process, especially like this one and in the economic context in which we are living, We believe as well that it's very important to link the management team and the Board, Very important. And it's very important from this point of view, more than important, it's helpful that the Chairman, in this case, myself, It could have some function, executive function, in order to, on the one hand, to help the management Tim, on the other hand, to have the elements that in order to help the Board with to fulfill the objective of supervision. And from this point of view, I thought as well that was very important to have some executive role in order to be very involved with the team, to be part of the team.
Combining these two elements, the question is very clear. The CEO of Juanfaro He's the 1st executive. He's going to lead the management team. And I'm going to have basically 3 Transient. 1, related to the legal questions here on the board.
2nd, communication, that I believe that is a very important thing in in an integration process like this one. And 3rd, auditing, which is the 3rd line of defense. And the rest of the functions. I'm going to report to Juan Fallow. As I repeat, he's going to lead the management committee.
And that's it from the point of view of the split. Of course, I have to have my role of the Chairman of the Board and so on, but from the point of view of the split, it's as clear as that.
Thank you, Jose Grazer. And if may I add, it will be a pleasure to work with you because I have done it, as you say, for 20 years in different capacities. And I think this is one, for me personally, one of the Most exciting parts of this project that we have a Board and a Chairman of the Board that has a track record and reputation he has and that we have that feeling to work with together. And obviously, a merger like this one is, By definition, extremely complex. There are many hard decisions.
Jaime Jose, Ignacio, we'll make sure that we take decisions that are the right ones in a much higher percentage probability than it would be without. So it's a clear plus, and we know what each of us needs to do, and We're really excited about it.
Okay. Thank you, Jose Ignacio. Thank you, Gonzalo. I'm afraid that's all we have time for today. I realize there's a lot of you waiting in the queue and the Bankia and CaixaBank IR teams will follow-up.
We will also be taking calls with management later on this evening and during next week. Thank you very much for your attention. We'll reconvene for Q3, and goodbye.