More Savings Bank Mergers in Spain
January 14th, 2010
Two more regional Spanish savings banks, Caja Duero and Caja Espana, agreed to merge on Monday, Spanish news reports said, as the pace of consolidation in the sector gathers pace amid the country’s recession.
The two banks, both based in the northern region of Castilla y Leon, reached the deal late on Monday after months of negotiations.
Spanish newspapers said the merger would be ratified by the boards of directors on Tuesday morning.
Last month, two regional Spanish savings banks, Unicaja and Cajasur, based in the southwestern region of Andalusia, also agreed to merge,
And in November two savings banks based in the northeastern region of Catalonia, Caixa Penedes and Caixa Laietana, announced that they had decided to join forces.
Spanish banks got off relatively lightly from the 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 once-booming Spanish property market, both through loans to developers and mortgages.
The Spanish economy, Europe’s fifth-largest, entered into recession at the end of 2008 as the international credit crunch hastened a correction which was already under way in the property sector.
Spain’s GDP contracted 0.3 percent in the third quarter, its fifth straight quarterly decline.
Story from Inquirer
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