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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.


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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