Caixa Laietana enters a merger to create Spain's strongest savings bank

Barcelona (ACN).- Catalan savings bank Caixa Laiteana approved on Tuesday a 'cold merger' with Spanish banks Bancaixa, Caja Madrid, Caja Insular de Canarias, Caja Segovia and Caja Rioja. The new financial group will be the strongest saving bank in Spain, with 340,000 millions in assets.

The new financial institution expects to borrow up to 4,465 million euros from the public fund FROB, which was especially designed by the Bank of Spain to facilitate fusions amongst Spanish 'cajas' (savings banks).

The 'cold merger' allows the Catalan savings bank to remain legally separate from the other entities and keep its name as well as corporate identity in its areas of influence. The cold merger has been done within the framework of a system of institutional protection, SIP.

The head of communications at Caixa Laiteana, Joan Herrero, said in an interview with ACN that the new savings bank will be a “stronger and sounder” company that will offer “more services” and will “generate more wealth in Catalonia”. He expects that by January 2011 people will see the existence of this new financial institution on the streets.

The strongest bank within the new group will be Caja Madrid, who owns 52.06% of the new entity. The second largest is Valencian Bancaixa (37.7%), followed by Caja Ávila (2.33%), Catalan Caixa Laietana (2.11%), Caja Segovia (2.01%) and Caja Rioja (1.34%).

The fusion of these seven savings banks is a new chapter in Spain’s strategy to regulate the financial sector, creating bigger and stronger banks that are more likely to handle the pressure of a new economical crisis.

Four other Catalan savings banks –Caixa Terrassa, Caixa Girona, Caixa Sabadell and Caixa Manlleu- merged this summer to create Unim. Besides, today was presented CatalunyaCaixa new corporate’s image, resulting from the merger of Caixa Catalunya, Caixa Tarragona and Caixa Manresa.