Naharnet

Three Spanish Banks Approve Merger

Three Spanish savings banks, Ibercaja, Liberbank, and Caja3, said Tuesday their boards have approved a merger that would create the country's seventh largest bank by assets.

The new bank is estimated to have assets of around 120 billion euros ($149.6 billion).

Ibercaja is to represent 46.5 percent of the new bank, Liberbank is to comprise 45.5 percent and Caja3 would represent eight percent, separate statements to the Spanish financial markets regulator CNMV said.

Spanish authorities have pressed savings banks, considered the weakest link in the country's troubled banking sector, to merge into what is hoped will be stronger institutions.

The Spanish banking network is being crushed by heavy exposure to a collapse of the real-estate sector.

The government has told banks they must set aside a total of 83.8 billion euros to cover potential losses on property loans.

On Friday, another bank formed from a merger of smaller institutions, Bankia, asked the state to inject 19 billion euros to help it abide by the more stringent capital rules, in addition to 4.465 billion euros invested by the state earlier this month.

Spanish media said other troubled banks could need yet another 30 billion euros.

Source: Agence France Presse


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