Four Spanish regional savings banks, led by Caja de Ahorros de Mediterraneo, said on Monday they have reached a preliminary agreement to merge some of their operations.
The agreement, which also includes Cajastur, Caja de Extremadura and Caja Cantabria, would aim to create a joint banking group that seeks to "strengthen solvency and assets of the participating banks," the banks said in a statement.
The move came as pressure piled on Spain's unlisted regional savings banks to speed up consolidation after the Bank of Spain took control on Saturday of savings bank Cajasur after it failed to merge with peer Unicaja.
Spain's mostly unlisted regional savings banks, which are often controlled by local politicians, are seen as financially vulnerable as they are the most exposed to Spain's property market slump. The government has given the banks a June 30 deadline to merge and consolidate.
The four banks said they would remain separate entities but would merge their risk policies, treasury operations, credit evaluation, internal controls and regulatory requirements.
They said the move was intended to create a "leading group in the Spanish financial system and to strengthen the solvency of the participating banks."
Combined, the four banks will have 135 billion euros ($167.36 billion) in assets, making it the fifth-largest banking group in Spain.
Saturday's takeover by the Bank of Spain of Cajasur stirred renewed fears about Spain's banking sector in financial markets and analysts said the move was likely to speed up consolidation by other regional savings banks such as the one announced on Monday.
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