The purpose of this paper is to examine how Spanish savings banks have come to compete directly with commercial banks. It also looks at how regulatory changes and corporate strategies have affected the nature of competition between the two types of bank in Spain.
There is a re‐examination of the existing bibliography as a basis prior to the analysis of new data as identified in surviving records from the Bank of Spain and the Spanish Confederation of savings banks (Confederación Española de Cajas de Ahorro (CECA)).
The work adopts a novel approach to explaining the current status quo in the Spanish banking industry and refocuses the performance of Spanish savings banks. The analysis highlights the role of the diverse institutional agents, i.e. the banks, savings banks, cooperative banks and mutual banks and the role these play in the evolution of competition. The effectiveness of the managers, of both the CECA and the savings banks, is also placed under the spotlight, and the part they play in the development of collaborative competition. The trajectory of Spanish banking, post deregulation, has been somewhat different from that of its European counterparts over recent decades.
Some lessons for present day managers emerge as to the role of diversification rather than scale under an otherwise tight regulatory regime and the role of competitive collaboration in banking market.
Particular attention is given to the impact that diverse organisational forms have on the evolution of competitive forces.
