27/03/2012 Spain (KMC) - CaixaBank has bought Banca Civica for 977m euros (£817m) creating Spain’s biggest bank in terms of domestic assets.
Spanish laws have been amended by the government to encourage mergers between collapsed and troubled banks.
Banca Civica was formed by combining four regional savings banks or “cajas”. The new merged bank will have 14 million customers and according to CaixaBank will have 342bn euros in combined assets, deposits of 179bn euros and loans totalling 231bn euros.
Caixa bank is now the largest bank in the domestic market, outstripping rival banks Santander and BBVA. It will be the market leader in the regions of Catalonia, Andalusia, Navarra, the Balearic Islands and here in the Canary Islands.
“The merger will help to consolidate the restructuring of the Spanish banking sector, by creating a leading bank in the Spanish financial system with an extensive regional presence, which will help support the country’s economic development” the bank said.
Caixa bank will not receive any state funds towards the takeover and will pay back the 977 million euros that Banco Civica received from the state-backed restructuring fund FROB.
On Friday the ruling party (Partido Popular) led by Mariano Rajoy will announce its 2012 budget, setting out how Spain will cut its public deficit to 5.3% of its output compared to 8.51% last year.
Unemployment in Spain is the highest in Europe at 23%.