A major Spanish savings bank born from a merger of seven institutions, Banco Financiero y de Ahorros, announced plans today to list on the market to tap private capital.
'The bank plans to call on the market, to list on the stock market, to comply with the government's core capital levels,' said bank president Rodrigo Rato.
Spain's oldest savings bank Caja Madrid last year announced plans to merge with six smaller rivals, under pressure from Madrid to restructure. The new bank was created on January 3 this year.
Economy Minister Elena Salgado last week announced new rules on the level of rock-solid core capital - equity capital and retained earnings - that the banks must have on their balance sheets.
Spanish lenders will have to have a core capital level equal to 8% of total assets by September, even higher than the 7% required under tough new, international 'Basel III' rules agreed last year.
The government threatened to take temporary stakes in those savings banks that do not meet the new requirements by September. The pressure to boost core capital spurred another major savings bank, La Caixa, to announce on Friday it would list its retail banking service through a complex operation.
La Caixa plans to transfer its entire €9.48 billion retail banking business into its listed investment arm Criteria, which is to be re-born as CaixaBank. As a result, it would become one of Europe's top ten financial institutions by market capital.
