SANTANDER, Spain June 21 (Reuters) - Spanish lender Bankia aims to seal its merger agreement with smaller domestic peer Banco Mare Nostrum (BMN) in the third quarter of this year and will complete the deal in the fourth quarter, Chairman Jose Ignacio Goirigolzarri said.
Bankia and BMN are both controlled by the state, after they ran into trouble following a property crash and needed rescuing. Spain’s bailout fund FROB, recommended the merger as the best bet to recover public funds.
“The due diligence and analysis phase has already been completed,” Goirigolzarri told a conference in Santander on Wednesday.
The chairman confirmed that Bankia had looked at possibly purchasing rival Banco Popular, before its rescue in early June when it was bought by Santander. But Goirigolzarri added that Bankia then decided to drop the idea.
“We came to the conclusion that although this (deal) made sense from an industrial point of view there was an execution risk that we couldn’t justify,” Goirigolzarri said. (Reporting by Jesus Aguado, Writing by Sarah White, editing by Paul E. Day)