CAJA MADRID and six smaller savings banks will pool their retail banking business in a new joint company that will be Spain’s biggest domestic retail bank.
This is the second move in two days by unlisted Spanish lenders to launch big consumer banks and consolidate the country’s fragmented financial sector.
When the seven cajas made the announcement on Friday about Banco Financiero y de Ahorros (Financial and Savings Bank), markets were still digesting the plan unveiled the previous night by La Caixa, the Barcelona-based savings bank, to launch a listed bank valued at €20.6 billion.
The Spanish government this week threatened to nationalise weaker savings banks that fail to find private sector investors and new capital by September, giving new impetus to a round of mergers that has cut the number of caja groups from 45 to 17.
Caja Madrid, Bancaja and savings banks from the Canaries and Rioja, will add all retail assets and liabilities to the new bank but will each manage local business. “The new group will function as a single entity, making it the third-biggest bank in the country, with €340 billion of assets, and number one in the volume of commercial and corporate banking business in Spain,” they said. – (Copyright The Financial Times Limited 2011)
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