Four Spanish banks reach merger deal
Four Spanish regional savings banks have reached a merger deal that will create Spain's fifth-biggest lender, one of the four said in a statement on Tuesday.
Caja Mediterraneo (CAM) said it would join Asturiana Cajastur, Caja Cantabria and Caja Extremadura following the resolution of a dispute over a senior executive appointment.
The accord was reached on July 15 after the intervention of the Bank of Spain, according to media reports. The agreement must now be ratified when the four banks hold shareholder general assemblies in September.
The merged entity will have assets worth more than 135 billion euros (176 billion dollars).
The four banks managed to pass recent stress tests to determine if they were sufficiently capitalised to absorb another financial shock, but only because they had received around 6.8 billion euros in state aid, press reports have said.
Five regional Spanish lenders failed the stress tests, the results of which were released last Friday.
The regional savings institutions in recent months have been encouraged to consolidate in order to boost their capital holdings, which were severely strained in the 2008 collapse of the Spanish real estate market.
Thirty-nine regional banks, from a total of 45, are now in the process of merging or forging operating alliances.
© 2010 AFP