Spain will ask for an additional 1.5 billion euros to recapitalize four banks, which although not nationalized, would be hard pressed to raise funding privately at a reasonable cost, Economy Minister Luis de Guindos said Monday.
The banks in question are Banco Mare Nostrum (BMN), Liberbank Caja3 and Ceiss. However, Liberbank might only need to offload its toxic assets to the bad bank being set up for that purpose to meet its capital requirements.
According to figures from the banks themselves, BMN needs additional capital of 460 million euros, and Caja3 almost 200 million. Ibercaja has begun merger talks with Caixa3, but has demanded that the bank be cleaned up first before proceeding with a tie-up.
According to preliminary figures, Ceiss may need an injection of 850 million euros, the amount the bank asked of the Spanish state in March. The Bank of Spain’s Orderly Bank Restructuring Fund (FROB) injected 525 million euros into Ceiss at the start of 2010. Andalusian savings bank Unicaja is considering merging with Ceiss, but has also insisted that its potential partner be restored to health first.
The sum requested for the four banks brings the total bailout from Europe to clean up the sector to almost 41 billion euros, including 37 million for four nationalized banks — Bankia/BFA, Novagalicia, CatalunyaCaixa and Banco de Valencia — and 2.5 billion to set up the bad bank asset management corporation.
The assistance comes accompanied by restructuring plans imposed by Brussels that include job cuts, the closure of branches and a drastic slimming down of balance sheets.
“The process of restructuring is vital in order for the errors of the past to be avoided,” De Guindos said Monday.