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Spain’s lengthy banking sector restructuring program has hit a significant snag, with the combination of 5 local banks falling through over worries one is too weak to join, according to Reuters.The bank in question, Caja Mediterraneo, has struggled under the weight of its property portfolio, decimated during the downturn.
The four other banks in the group that would make up Banco Base, are not likely to go their own ways, however. Cajastur, Caja Extremadura and Caja Cantabria are expected to continue to merge still, according to Reuters.
The Spanish government is now hoping one of the country’s big banks will buy Caja Mediterraneo. The candidates, according to El Confidencial, are Santander, BBVA, Banco Popular, La Caixa, and Banco de Sabadell.
Right now, all of these candidates want to government to provide some sort of protection for losses on the acquisition, though Santander may be considering an acquisition without those guarantees.