Barclays is considering a move for one of Spain’s ailing regional banks in a multi-billion pound bailout, it was reported today.
Chief executive Bob Diamond is said to have held talks with Spanish prime minister Jose Luis Rodriguez Zapatero over the possibility of the bank receiving guarantees from the government in the event of any deal, the Sunday Times said.
Spain’s regional banks, known as Cajas, have been a major headache for the country’s government after a property boom fuelled by their lending imploded after the credit crunch.
The Spanish government has already forced through a restructuring that cut their number from 45 to 17 and has ordered them to raise €20bn to refinance themselves.
Most of that money will come from the state, but the Spanish government is also said to be very keen to attract foreign investors.
Today’s report said the talks with Barclays were not about a particular deal, but could allow the bank to identify potential opportunities in the country.
Barclays already has a presence in Spain, but has been urged by City analysts either to increase the size of the business or else leave the country.
A regional bank would give it that opportunity to expand, but it is said to want government assurances it will not be liable for any potential losses from the existing loan portfolios of the regional banks.
They lent nearly €500bn to property groups before the market crashed. Concern over their health has hit Spain’s sovereign debt rating and contributed to continuing fears about the health of the eurozone.
Barclays said the contents of Mr Diamond’s discussions were private.