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Popular to lead Spanish bank consolidation

Popular plans to be a key player in any domestic banking-sector consolidation, Chairman Angel Ron said in an interview on Friday with Expansion newspaper.

“Will there be consolidation in the Spanish banking sector? We don't know, but whatever happens, our goal is to take an active role in any consolidation,” Ron told the newspaper.

Spanish banks have so far weathered the global financial crisis reasonably well because they largely avoided investing in the troubled US subprime market and have robust provisioning levels.

But analysts have expressed concerns about the impact of the liquidity drought on the small and mid-sized banks and savings banks, flagging the likelihood of mergers in the mid-term.

Ron acknowledged that the financial crisis will affect the Spanish banking sector, but said he still expects the banks to post very robust earnings and dividend growth.

“The crisis will affect business growth, and consequently earnings growth ... But the Spanish banks will be able to maintain high earnings and dividend growth against the difficult environment,” he said.

On further overseas expansion, Popular's Ron said the bank's strategy is a long-term one, but he did not rule out further growth in the United States, where it already is present in Florida.

“If there are opportunities in Florida in the next few months or years, we would try to take advantage of these but always with a long-term outlook and not as an opportunistic move based on price,” the chairman said. (Reuters)