Popular & Credit Mutuel team up, form Spanish bank

Spain's third largest retail bank Popular said it has teamed up with France's Credit Mutuel-CIC to develop business opportunities in core markets including Spain's consolidating bank sector.

As part of the wide-ranging agreement Credit Mutuel will take a 5 percent stake in Popular and the companies will create a new bank based in Spain with 2 billion euros of assets, Popular said on Monday.

"The new bank will take advantage of growth opportunities in the Iberian financial market, by participating in the current banking sector restructuring" Popular said in a statement to stock market regulator CNMV.

The new bank have 123 branches, 505 employees and 258 million euros in shareholders funds, Popular said without disclosing other details.

Credit Mutuel and Popular have worked closely together in the French market, but will now extend this collaboration to clients in Germany, Spain and Portugal.

"This looks like Popular is getting serious in terms of its plans to grow in Spain by taking advantage of the restructuring going on, particularly amongst the savings banks" an analyst at a leading Spanish brokerage said.

Spain's 45 savings banks are immersed in a consolidation process aimed at halving their numbers in the near term. Popular has expressed interest in buying savings banks assets which come up for grabs as a result of the reorganisation.

At 08.20 GMT Popular shares rose 1.64 percent to 4.44 euros, outperforming the blue chip IBEX.