Banco Financiero y de Ahorros is planning to reserve about €9.2 billion to cover loan losses and write down the value of its real-estate holdings, The Wall Street Journal reports. The Spanish bank, formed by the merger of seven savings banks, including Caja Madrid, may also move its troubled real-estate assets into a bad bank.
The bank will need about €2 billion in fresh capital to raise its solvency levels to the new minimum of a core Tier 1 ratio of 8%. Banco Financiero is also planning to offer its shares in the market.
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