Four Savings Banks – CAM, Caja Cantabria, Caja Extremadura and Cajasur- are about to merge and form the third largest Spanish ‘caja’. They will have assets worth 135 billion €, 14000 employees and as many as 2300 offices.
The merger comes at a time when the Spanish economy is being criticized by the IMF for being unable to maintain a hold on the state deficit. The move is being called a “cold or virtual fusion” and will help the individual banks in the creation of a protection system for strengthening solvency.
The way the system will be formed is – CAM and Cajastur 40 percent each, Cantabria 9 percent and Extremadura 11 percent. Under this system, policies which are related to credit rating, treasury, risk regulatory needs and internal control will be the same for all banks, but each of them will retain its regional nature, judicial outlook, community service and governing institutions.
The Chairpersons and Directors of all the four banks have signed the “protocol of intentions” and it has been placed on the desk of the Bank of Spain. Now it is dependant on the government and competitive bodies’ authorizations.
The International Monetary Fund, meanwhile, has termed the recovery of the Spanish economy as ‘weak and fragile’ and asked the Spanish government to initiate measures for controlling the state deficit. IMF experts have also said that the Spanish economy is likely to grow only by 1.5 percent to 2 percent in the medium term.