CaixaBank becomes Spain's biggest bank by assets

Spain's biggest bank in terms of assets has been created after CaixaBank bought Banca Civica for 977m euros ($1.3bn, £817m).

The government has amended laws to encourage mergers between banks, many of which collapsed following the bursting of the property bubble.

Banca Civica itself was formed by combining four troubled "cajas", or regional savings banks.

The merged bank will have 14 million customers.

CaixaBank will have 342bn euros in combined assets, deposits of 179bn euros and loans totalling 231bn euros, the bank said.

The deal will be completed by the third quarter and will generate cost savings and other benefits of 540m euros by 2014.

"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.

The Barcelona-based bank La Caixa, which has a majority stake in CaixaBank, will retain 61%.

Following the merger, CaixaBank will be the market leader in the regions of Catalonia, Andalusia, Navarra, the Balearic Islands and the Canary Islands.

Source & Image : BBC