Banco de San Sebastián (Donostiako Bankua), 1909-1975

The gestation and trajectory of the Banco de San Sebastián, founded in 1909, was very particular. The creation of what we could call the new Banco de San Sebastián had, in a certain sense, its antecedents in what had been born in 1862, promoted fundamentally by the mercantile class of San Sebastián. In this respect, it had little to do with the Banco Guipuzcoano. The latter had been promoted by stockbrokers from Bilbao, although the majority of the shareholders were soon to come from Gipuzkoa. In the case of the Banco de San Sebastián, its promoters were Donostians linked to commercial and industrial activity.

The date of the deed was 25 June 1909. The grantors were: the lawyer Enrique Arizpe y Yarza, and the merchants Joaquín Lizasoain y Minondo and Marcelino Seminario Izu. The deed indicated the operations to which the "Compañía mercantil anónima Banco de San Sebastián" would dedicate itself, which were none other than: "as many mercantile businesses or operations as it considered beneficial", although it was also added that it would be mainly oriented towards banking activities such as drawing, discounting, lending, keeping current accounts, collecting deposits, etc. Likewise, it also contemplated the following objectives: granting mortgage loans, taking part in the creation or modification of construction business companies, etc.

The share capital of Banco de San Sebastián was set at ten million pesetas, represented by 40,000 shares with a par value of 250 pesetas each. The shares were divided into two series of the same amount: the first was put into circulation immediately, while the second was reserved in the portfolio until the first 20,000 were fully subscribed and paid up. It was then, and not before, that the Shareholders' Meeting could approve the issue of the second half of the securities.

The Bank's first Board of Directors was composed of 12 members, with three deputy members appointed. It was the Board appointed by the preparatory meeting held at 16, Calle del Puerto, on 23 June 1909. The list of councillors included the three people who had granted the founding deed, as well as other figures representative of the city's economic life, with commercial and industrial businesses: Ignacio Echaide y Lizasoaín; Ignacio Eguía y Elizarán; Manuel Mendizábal; Luis Gaytán de Ayala Brunet; Eugenio Londaiz Garbuno; Félix Zuazola; Martín Urquijo; Juan Bautista Arsuaga and Pío Bizcarrondo. Juan Azcue was appointed Managing Director of the Banco de San Sebastián.

In the composition of the Board, the relationship commercial and industrial capitalism, common features among the San Sebastian bourgeoisie, can be seen. For example, several members of the Brunet family, former shareholders of the original Banco de San Sebastián, were present in the new bank in 1909. Their relationship with commerce, with banking - since they owned their own family financial institution - and with industry, not only because they owned a textile company, but also because of their multiple shareholdings in other companies, is evident. Other board members, such as Londaiz and Garbuno, offer another example of these connections commercial and industrial activity. Formerly linked to the commercial world, they had their own family business, as well as participating as directors of other companies, such as Papelera Española, etc.

The favourable situation in the years following the founding of the Banco de San Sebastián helped its expansion. In 1912, it opened its first branch in the province, in Irún. Five years later, it did so in Beasain, and 1917-22, the opening of branches was on the increase, as a result of the growth of the Bank itself. This economic growth was largely due to the positive effects that Spanish neutrality in the 1914-18 war had on the economy in general. These were also years of prosperity for Guipúzcoa, which even lasted beyond the end of the First World War.

With regard to some economic indicators, it is possible to appreciate the good momentum that the financial institution experienced during its first decade of existence. For example, 1911 and 1920, the bank's profits increased more than 16-fold. During the 1920s, liquid profits were maintained continuously, although it should also be noted that, at the end of the 1920s, a level was reached which could not be surpassed in subsequent years.

Moreover, in 1920, a momentous event occurred for the Bank. The General Meeting of Shareholders held that year passed resolutions that would mark the future of the Donostia-San Sebastián institution. Firstly, it was decided to reduce the share capital, cancelling the reserved shares in the portfolio that had not been put into circulation. At the same time, it was agreed to increase the capital to 20 million, creating shares of 500 pesetas each, of which 50% of their value had already been paid up by the first shareholders. The operation was carried out by exchanging the original 20,000 new shares for the old ones, and at the same time handing over another 20,000 to the Banco Hispano Americano, in accordance with the agreement signed with the aforementioned entity.

In this way, the Hispano Americano became part of the Banco de San Sebastián, which meant that the number of directors had to be increased. Thus, from the initial 12 members, the Board of Directors increased to 18 members, to accommodate those corresponding to the Hispano Americano.

While the years of the First World War and a couple of other years were favourable to bank expansion and the accumulation of reserves, the following years could not maintain the same rate of growth. 1924-25 there was a crisis in the credit , which also had negative effects on the San Sebastian market. But even worse was the crisis that took place from 1929 onwards, and the situation triggered by the Civil War. After the entry of the national troops into the city of San Sebastian in September 1936, the Memories of the Bank of San Sebastian in the years that followed described the "extraordinary problems" that were being experienced. The credit needs after September 1936 can be assessed through the high amount of credits granted by the Banco de San Sebastián, which amounted to 18 million pesetas. After the war, the banking status quo, together with the dependence on Hispano Americano, marked the activity of the San Sebastian institution.

The disappearance of the status quo in 1962 dynamised the structure of the Spanish financial . The moves among the banks to achieve a larger size through mergers or takeovers soon materialised in the agreements taken by the Boards of Directors of Banco Hispano Americano and Banco Central, which to some extent also affected Banco de San Sebastián. In November 1965, the bases for the merger were approved. At that time, it was mainly Hispano Americano that led the operation, always within the limits imposed by the Banking Law. Although the Ministry of Finance authorised the merger of Central and Hispano Americano on 18 December of the same year, some voices were soon raised in public opinion about the advisability of excessive concentration in the banking sector if the merger went ahead. But it was the tax burden of the merger that ultimately frustrated the operation.

Thus, Banco de San Sebastián was not involved in any changes at that time. However, the expansionist policy initiated by Hispano Americano, and also followed by Central and other large banks, led to a considerable increase in the number of branches from 1964 onwards. This policy was made possible not only by the opening of new branches, but also by the absorption of other institutions in operation.

Within this dynamic, it is not surprising that in 1975, the Banco de San Sebastián disappeared, subsumed into the Hispano Americano. The situation at the time, the expansion of the big banks and the restructuring and modernisation of the banks resulted, in the case of San Sebastian, in the absorption of the smallest by the largest. The operation was approved at the Donostia-San Sebastian bank's shareholders' meeting held on 9 March 1975. A few days later, on 6 April, the Banco Hispano Americano shareholders' meeting unanimously approved the merger, or rather, the purchase of Banco de San Sebastián by Hispano.

In accordance with the regulations in force in these cases, the necessary steps were taken with the Ministry of Finance to complete the merger. These steps were entrusted to the Madrid lawyer Luis de Usera, Chairman of the Board of Directors of Banco Hispano Americano, and the San Sebastian industrialist Isidoro Artaza, representing Banco de San Sebastián. The resolutions of both meetings were published on three occasions in the Official State Gazette, as well as in the Madrid and San Sebastian press (Alcázar, Informaciones and Pueblo, in the case of Madrid, and El Diario Vasco; La Voz de España; Unidad and Hoja del Lunes, in the case of San Sebastian).

When the legal deadlines had passed and no shareholder or creditor objected to the transaction, all the assets and liabilities of Banco San Sebastián were transferred en bloc to Hispano Americano, including the head office, located on Avenida San Sebastián, as well as all the offices and branches. The staff were also incorporated into the staff of Banco Hispano Americano, with the same working conditions, category and emoluments as before.

The Banco Hispano Americano's policy was to train staff in its own centres, contrary to what the Central Bank was also doing at the time. However, in the case of the merger with San Sebastián, Hispano Americano absorbed its staff at a time when banking was undergoing rapid transformation, among other things, through the introduction of new technology. This situation did not deprive Donostia's banking staff of being able to complete their training through courses that enabled them to better adapt to the new ways of the Spanish financial .

With this merger, the city of San Sebastián symbolically lost one of the financial institutions that had borne its name and which, in a way, had taken up the baton from the first Banco de San Sebastián, the issuing bank that was founded in 1862, but which must have disappeared in 1874.

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