Spanish savings banks in consolidation talks ahead of 30 June deadline
29 May 2010
Spain's second-biggest savings bank, Caja Madrid, and five smaller lenders have initiated talks on a possible merger as banking combinations continued to be explored ahead of a government rescue-fund deadline.
The Madrid-based lender with around €190 billion in assets is in talks with Caja Insular de Canarias, Caixa Laietana, Caja de Avila, Caja Segovia and Caja Rioja over a combination under a Bank of Spain-endorsed model which would see them merge some functions, according to the lender's filing to regulators today.
The merger would combine lenders with total assets of around €228 billion according to data from the Spanish savings-bank association, known as CECA.
Cajamadrid said the six were negotiating an arrangement under which they would pool assets for provision of liquidity to each other while retaining their distinctive brand names.
Meanwhile, merger negotiations for shoring up Spain's weaker banks gathered pace Friday with the country's two largest savings institutions saying they were in separate talks with smaller regional competitors.
The central bank, the Bank of Spain, considers consolidation as the preferred route for maintenance of liquidity among entities left heavily exposed when the country's real estate sector virtually collapsed following years of solid growth.
