James BryceA STRUGGLING Spanish savings bank is in discussions over the possibility of becoming nationalised, after a planned merger fell through.
The Alicante-based CAM is presenting the Bank of Spain with a new business plan and an application for money from Spain’s state-financed Fund for Orderly Bank Restructuring (FROB).
Analysts have estimated that the amount needed by the bank would give FROB control of more than 50 per cent of the bank.
Nationalisation of the bank would be the first since the Spanish government set new minimum capital requirements.
CAM, Spain’s 10th largest lender, had been in advanced merger talks with three smaller banks, Cajastur, Caja Cantabria and Caja Extremadura, would have formed Banco Base.
The proposal fell through following fears about CAM’s solvency.
For any us involved in finance now or in the past this outcome is of no surprise.
CAM systematically failed to check validity of clients documents. Lent against valuations produced by their own internal valuation company and funded any developemnt put under their nose.
Reckless lending was the name of the game and CAM were up there with Caja Sur