Two Spanish savings banks set to merge: reports
Two regional Spanish savings bank groups, Caja Duero-Espana and Banco Mare Nostrum, are set to merge, reports said Wednesday.
Caja Duero will announce "in the coming days" that it will be integrated into Banco Mare Nostrum, creating the fourth largest savings bank in terms of assets under management, business daily Expansion reported.
Contacted by AFP, a Banco Mare Nostrum spokesman would not confirm the reports but said it was in talks with several financial groups "without there being formal talks or any type of agreement."
The merger of the two would solve Caja Duero-Espana's solvability problems, business daily Cinco Dias reported.
Spain's 17 regional savings banks, weighed down by loans that turned sour after the collapse of a housing bubble in 2008, are under pressure to find more cash from investors as Madrid seeks to stamp out fears of an Irish-style EU-backed bailout.
Last month, the government approved stricter rules on the amount of rock-solid core capital the banks must hold.
Under the new rules, savings banks must raise the proportion of core capital they hold to 10 percent of total assets from the current six percent.
If they cannot raise the extra capital from private investors, the savings banks must transform themselves into traditional banks and allow the state to take a temporary stake in them until their finances are put on a stronger footing.
© 2011 AFP