Shares in Catalan banks fell sharply on Friday, dragging the entire stock market with them after Catalonia’s regional parliament declared independence.
CaixaBank, Spain’s third-largest lender, fell by around five percent while Sabadell, the country’s fifth-biggest bank, fell roughly six percent.
Shares in the two banks have fallen since Catalonia’s separatist government went ahead with an independence referendum in the wealthy northeastern region on October 1, despite it having been deemed illegal by Madrid and the courts.
Some clients withdrew their deposits from the banks, prompting the two lenders to move their legal headquarters out of Catalonia to other parts of Spain.
Neither CaixaBank nor Sabadell have revealed how much money was withdrawn, but they said the flow stopped after they moved their headquarters.
Nearly 1,700 companies have moved their headquarters outside of Catalonia since the referendum.
The International Monetary Fund warned earlier this month that Spain’s strong economic recovery could be dealt a setback if the political turmoil over Catalonia’s independence push continues.
Catalonia, a region of 7.5 million people in the region bordering France, generates about 20 percent of Spain’s economic output.
As a separate country, its gross domestic product would be about as big as Portugal’s or Finland’s.
AFP