Another Spanish savings bank group prepares to list shares

1st February 2011, Comments 0 comments

Another Spanish savings bank group has announced steps to create a full-blown commercial bank that can tap the stock market to raise capital if needed to meet new government solvency requirements for the troubled sector.

Caixa d'Estalvis del Penedes, Caixa Geral de Ahorros de Granada, Caja de Ahorros de Murcia and Sa Nostra Caixa de Balears said in a statement late on Monday they will transfer their financial operations to a new bank, Banco Mare Nostrum, created by the four institutions.

"The transfer of their financial activities to Banco Mare Nostrum will take place over the coming months," the statement said.

The new bank will be able to trade on the stock market if it chooses to improve its funding options.

Spain's savings banks, hobbled by loans to real-estate developers since the collapse of a property bubble, are at the heart of market fears that Spain could need a bailout like the ones granted Ireland and Greece last year.

Last week the government announced all lenders will have a core capital level equal to 8.0 percent of total assets by September if they are listed, and a level equal to 9.0-to-10.0 percent of assets if they are not listed.

The government has threatened to take temporary stakes in those savings banks that do not meet the new requirements by the September deadline.

Since the new capital requirements were unveiled Barcelona-based savings bank La Caixa announced it would move its retail banking operations into its listed investment arm Criteria, which is to be re-born as CaixaBank.

And a different savings bank group led by Caja Madrid, Spain's oldest savings bank, has already agreed to create a full-blown commercial bank called Banco Financiero y de Ahorros that will list its shares on the stock market.

© 2011 AFP

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