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Spain suspends sale of bailed-out bank

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(Globalpost/GlobalPost)

Spain suspended a plan to sell off one of its ruined banks, Catalunya Banc, the lender said on Tuesday, after it reportedly received no viable offers.

Catalunya Banc was one of five Spanish finance groups taken over by the state-backed bank rescue fund, FROB, and has received billions of euros in aid from Spain and the eurozone.

It is one of the casualties of the collapse of Spain's property boom in 2008, which tipped Spain into recession, destroying millions of jobs and prompting a major restructuring of its banks.

"Since the deadline for presenting non-binding offers to acquire Catalunya Banc has passed, the FROB has decided not to proceed with the process," the bank said in a statement to the stock market regulator.

Under a eurozone bailout agreement that has channelled some 40 billion euros ($52 billion) to Spain's financial sector, Spanish authorities have until 2016 to sell off Catalunya Banc.

The statement said this leaves "a sufficient time frame to find the best option for Catalunya Banc that will minimise the cost for the taxpayer".

Spanish newspapers reported that only two banks, Santander and Banco Popular, had made offers to buy Catalunya, and neither was considered suitable.

Economic daily Cinco Dias reported that the government was unwilling to sell off the bank in parts and was considering merging it with Bankia, the biggest of the bailed-out Spanish lenders.

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http://www.globalpost.com/dispatch/news/afp/130305/spain-suspends-sale-bailed-out-bank