EU approves Spain's bank restructuring

November 28, 2012 10:35 AM GMT

European Union competition regulators approved on Wednesday restructuring plans for nationalized Spanish lenders Bankia , NCG Banco , Catalunya Banc and Banco de Valencia .

"The approval of the restructuring plans of BFA/Bankia, NCG, Catalunya Banc and Banco de Valencia is a milestone in the implementation of the Memorandum of Understanding between euro area countries and Spain," EU Competition Commissioner Joaquin Almunia said in a statement, referring to Spain's euro zone bank bailout.

The European Commission said Banco de Valencia would be sold and integrated into Caixabank , and the other three banks would need to cut their balance sheets by more than 60 percent over the next five years.

There will be a pay cap and a coupon payment and acquisition bans on the banks during their restructuring period. Investors will have to share the revamp costs, reducing the needed state aid by about 10 billion euros.

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(Reporting by Foo Yun Chee; editing by Robin Emmott)

EU approves Spain's bank restructuring

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