Spanish banks to merge

 
City A.M. Reporter
SPAIN’S La Caixa agreed last night to the takeover of smaller rival Banca Civica by its listed arm CaixaBank, creating Spain’s biggest bank by domestic assets.

CaixaBank offered €1.97 per share for Banca Civica in an all-share deal valuing the whole bank at €980m.

A second wave of consolidation in the Spanish banking sector is under way as lenders look to raise capital levels to cover losses sustained after a decade-long property and construction bubble collapsed in late 2007.

With about €285bn in assets, CaixaBank is around four times the size of Civica and the move will form Spain's biggest bank in Spain’s domestic market, outstripping even Santander and BBVA.

CaixaBank will not request state funds for the takeover and will pay back the €977m that Banca Civica has received from the state-backed restructuring fund FROB.

The banks said they hoped to finalise the deal and get the approval of their shareholders by 30 June.