Two more Spanish savings banks finalise merger
Two more regional Spanish savings banks, Caja Duero and Caja Espana, on Saturday announced they have approved a merger deal, as the pace of bank consolidation picks up amid Spain's economic problems.
The merger of the two banks, both based in the north-central region of Castille and Leon, was approved by their respective boards of directors, according to a statement sent to the Spanish financial markets regulator (CNMV).
The merger, first announced in January, creates the savings bank Caja Espana de Inversiones, Salamanca y Soria, the statement said.
According to Spanish media it would become the country's eighth largest financial group.
Spain has seen over the past year other savings bank mergers and more announced merger plans under pressure from the Spanish central bank and the government, which has set up funds to facilitate the restructuring of the sector.
Spanish banks got off relatively lightly from the global subprime mortgage crisis in 2008, as the country's strict rules meant they did not invest heavily in the high-risk loans that hurt financial institutions elsewhere.
But many, especially smaller unlisted saving banks usually controlled by regional politicians, were badly hit by the collapse of the country's once-booming property market, both through loans to developers and mortgages.
The Spanish economy entered recession at the end of 2008 and only emerged with tepid 0.1 percent growth in the first quarter this year.
The crisis has sent unemployment soaring to more than 20 percent, the second highest in the European Union after Latvia.
© 2010 AFP