Bancaja, Caja Madrid Confirm Merger Talks

Spanish savings bank Bancaja Thursday confirmed it's in talks to merge with bigger peer Caja Madrid and five other lenders, in a deal that if successful would create the biggest savings bank in Spain by assets.

The board of Bancaja -- the country's fourth largest savings bank by assets -- will meet later Thursday to discuss the possible tie-up, it said in a regulatory filing. Caja Madrid also confirmed the talks in a separate filing.

A merger between the seven savings banks would create a banking giant with EUR340 billion in assets, surpassing chief rival La Caixa of Barcelona, which has EUR280 billion in assets. It would still be smaller than listed banks Banco Santander SA (STD) and Banco Bilbao Vizcaya Argentaria SA (BBVA).

-By Christopher Bjork, Dow Jones Newswires, +34 91 395 81 23, christopher.bjork@dowjones.com

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