Caixabank in talks with Bankia for a fusion

Two out of Spain's four top banks, Caixabank and Bankia, are in talks for a fusion, as both financial institutions have confirmed.

Although both clarify that no deal has been reached, it is understood that negotiations are well underway, after both boards of directors have greenlighted the operation.

In a statement on Thursday evening, Caixabank explained that "a confidentiality agreement has been signed as to exchange information" and assess a possible fusion.

If the operation was successful, the new entity would be the first in Spain in volume of total assets.

According to Statista, Caixabank accounted for 355 billion euros in assets in 2019, while Bankia had 208 billion euros.

Spain's economic affairs ministry explained that a team in the Fund for Orderly Bank Restructuring (FROB) – the public body managing the resolution processes of credit institutions and investment firms – is "permanently" assessing the conditions of the market in order to "protect the general interest," as the Spanish government owns 60% of Bankia's shares.

Caixabank is Catalan in origin, but following the 2017 independence push and ensuing political uncertainty, moved its headquarters outside Catalonia days after the referendum.