The Spanish Central Bank has been forced to take control of
CajaSur, the ailing Roman Catholic-controlled savings bank, in its
efforts to restore confidence in the country’s struggling banking
sector.

The central bank said that the bank’s
‘viability problems’ and the failure of a tie-up with Unicaja,
another mutual, was behind the measure, which will see the bank
recapitalised with more than €500m ($628m). 

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“CajaSur accounts for scarcely 0.6% of the
assets of the Spanish banking system, whose soundness will not be
in the slightest affected by this situation,” the bank added in an
upbeat statement.

The bank also said that “depositors and
creditors …have absolutely no cause for concern” following the take
over and insisted that CajaSur will continue operating
normally.

CajaSur has €13bn ($16.35bn) in loans and
reported a net loss of €596m for fiscal 2009.

 

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