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HindustanTimes Wed,26 Nov 2014

EU nod for Spain bank restructuring

AFP  Brussels, November 28, 2012
First Published: 21:27 IST(28/11/2012) | Last Updated: 21:34 IST(28/11/2012)

The European Commission cleared on Wednesday the restructuring of four Spanish banks - Bankia, NCG Banco, Catalunya Banc and Banco de Valencia - as part of a major overhaul of Spain's stricken banking sector.

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Meanwhile, nationalised Bankia, whose shares had been suspended from trading on Wednesday by regulators, said after the announcement that it would cut 6,000 jobs, about 28% of its staff, by 2015 as it tried to stem losses. The bank said it intended to return to profit in 2013, but warned of a $9-billion loss this year.

The Commission said the restructuring of the four banks "will allow them to become viable in the long-term without continued state support".

Banco de Valencia, whose independent future could not be secured, will be sold and integrated into CaixaBank, the Commission said in a statement.

Spain secured funding of up to 100 billion euros from its eurozone partners in June to help rescue its banks. "The approval ... is a milestone in the implementation of the (accord) ...," European Competition commissioner Joaquin Almunia said.


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