Spain's Unicaja, Caja Espana savings banks merge

MADRID (AP) -- Spanish regional savings banks Unicaja and Caja Espana have merged following the government's recent requirement that banks raise substantially their provisions set aside to cover toxic real estate exposure.

The merger, in which Banco Caja Espana-Duero (Banco Ceiss) is effectively absorbed into Unicaja Banco, creates a group with approximately €80 billion ($104.9 billion) in total assets and a turnover of €120 billion ($157.4 billion), according to a joint statement released late Friday.

The deal must first receive Finance Ministry and central bank approval and would require €850 million ($1114.86 million) of state aid, which is added to €525 million ($688.59 million) already injected into Caja Espana in 2010 by the Bank of Spain's restructuring fund (FROB).