Spain Government to Ensure That Mergers Among Lender Are Viable

Spain’s government will watch to ensure that mergers sparked by a real estate cleanup are viable, an Economy Ministry official said.

Investors may be skeptical about mergers in which a bank that has received public aid buys another, said the official, who asked not to be identified in line with ministry policy.

Economy Minister Luis de Guindos announced Feb. 2 new rules imposing 50 billion euros ($65.5 billion) of charges in the form of provisions and capital on the country’s banks to force them to adjust for the loss of value in the real estate they piled up during Spain’s property crash. The government will give banks that agree to merge an extra year to fulfill the requirements as part of a drive to accelerate consolidation between lenders.

Rodrigo Rato, chairman of Bankia SA, Spain’s third-biggest banking group whose parent company has received aid from the government’s bank rescue fund, said yesterday that the company was interested in acquiring Unnim, a Catalan lender taken over by the government, Cinco Dias reported today.

To contact the reporters on this story: Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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