MARBELLA CLUB

The Spanish government is facilitating a potential merger between struggling lenders Banco Mare Nostrum, Liberbank, Unicaja, and Ibercaja, reports the Financial Times . The combined entity resulting from such a deal would wield a 270B euro balance sheet, making it Spain's fifth-largest by asset size. Bankia, Spain's last attempt at a similar arrangement (formed in December 2010 as a merger of 7 banks) was bailed out by the government to the tune of 4.5B euro last week when that amount of government-held debt was converted to equity. From the FT: Analysts have expressed concerns that the government could repeat the mistakes of Bankia, a merger of seven savings banks in which Spain took a €4.5bn stake last week – the country’s largest nationalisation since the crisis began. “Merging weak banks does not create a strong bank. That should be obvious by now,” said one banking analyst.