It was a simple question of loyalty.
After all, how could he doubt the local bank that opened an account for him just after he was born in 1935 with a gift of 5 pesetas, a small fortune in those days, as a sign of respect to his parents, who were life-long customers? Now the 77-year-old Valls feels betrayed as he finds himself locked out of his hard-earned money.
“I don’t understand what’s going on,” he said. “The only thing I want is for them to return what is mine.”
His plight is shared by thousands of his fellow townspeople and nearly a million across Spain: Lured by the family-like ties nurtured between bankers and customers, they poured their life’s savings into higher-yielding financial instruments recommended by the people managing their money. When boom turned to catastrophic bust, they found the stock they had acquired had become all but worthless.
Once-lifelong friendships have turned to enmity, as victims cry treachery. In some towns, angry customers have burst into bank branches with shotguns and yelled death threats. Despair has set in as many of the victims are elderly people who were depending on the money to fund their last years.
In towns like La Vall D’Uixo, bank employees and customers would often have close relationships, sometimes going out to have coffee and other times finding themselves sitting together at school plays.
But those times are over Jose Romero has spent nearly four decades working at Bancaja, a regional savings bank that is now part of Spanish banking giant Bankia. He said relationships with clients have recently become very tense and sometimes have hovered on the verge of violence.
“The client trusts the brand, but the employee even more,” Romero said. “But when you touch their money, people change radically. We’ve seen death threats, insults, people who come in with shotguns.”
Romero heads a Bancaja union and he has seen an increase in the number of complaints from employees who feel they can’t go out on the street because they are scared.
Spain’s Confederation of Savings Banks declined to comment on gun incidents at bank branches and said all investors in the bank stock had to authorize purchases by signing contracts containing “brief and non-technical language” about the risks they were agreeing to take on. The confederation added in a statement that investments in “preferred stock” were sound when introduced but their value was hurt by market conditions and Spain’s deteriorating economy.
Preferred stock entitles the holder to a fixed-rate dividend, paid before any payouts are distributed to holders of ordinary shares- common stock. Holders of such preferred stock also rank higher than ordinary shareholders in receiving proceeds from the liquidation of assets if a company goes into court protection.
Romero, like most of his colleagues, sold preferred stock in his bank and believed at the time that he was promoting a good product. They were first offered at the end of the 1990s at a time of economic boom and many people benefited from the returns. The problems started when people started signing up between 2007 and 2009, just as the bubble was bursting.