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 MADRID: A union of Spanish savings banks, Banca Civica, said Tuesday it plans to list on the Madrid stock market, following the example of other regional banks as the government pushes the sector to find new capital.

"We will enter the stock market imminently," Banco Civica co-chairman Enrique Goni told a news conference.

Goni said the bank, which emerged last year from the union of four regional savings banks, planned to list between 25 and 40 percent of its capital, and the final figure would be "closer 40 than 25."

Spanish media has speculated recently about the possible listing of Banca Civica, after the failure of negotiations with the US buyout firm JC Flowers, which wanted a 40 percent share in exchange for an injection of 400 million euros ($550 million).

Spain's 17 regional savings banks are at the heart of market fears that the country could need a humiliating debt bailout like those granted Ireland and Greece last year.

To allay these concerns the Spanish government is racing to strengthen the savings banks, which account for about half of all lending.

The government has asked them to come up with fresh capital of 20 billion euros by September and the stock market appears to be the option of choice for them to raise the new funds.

The largest union, Banco Financiero y de Ahorros, led by the oldest savings bank in the country, Caja Madrid, recently announced it planned a listing.

La Caixa plans to transfer its entire 9.48-billion-euro ($13 billion) retail banking business into its listed investment arm Criteria, to be re-born as CaixaBank.

The government has threatened to take temporary stakes in those savings banks that do not meet the new capital requirements by the September deadline.

Copyright AFP (Agence France-Presse), 2011

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