Spanish savings banks Caja Madrid and Bancaja are in talks about a merger which would create the country's biggest savings bank, dpa cited media as reporting today. The merged entity would also include five smaller savings banks, which Caja Madrid has agreed to join operations with. The new bank would have total assets of about 340 billion euros (408 billion dollars), reports said. Caja Madrid chairman Rodrigo Rato - a former head of the International Monetary Fund - was expected to chair the new entity, which would allow the participating banks to retain their brands and legal structures. Caja Madrid is currently Spain's second-largest savings bank, after La Caixa, while Bancaja is fourth-largest. Spanish savings banks have speeded up merger plans in order to be able to get financial support from the bank restructuring fund FROB. About a half of the country's 45 savings banks are carrying out or discussing mergers. International analysts have urged Spain to restructure its savings bank sector as part of attempts to revive its sluggish economy.
