Spain announced Friday it has nationalized three troubled banks that failed to meet new capital requirements and said the process of restructuring its financial sector is now complete.
The Bank of Spain identified the three as Unnim, CatalunyaCaixa and NovacaixaGalicia. All three are the result of mergers of smaller savings banks known as cajas, a sector that was heavily exposed to Spain's imploded real estate sector. After capital injections, the government now owns more than 90 percent of the three banks' shares. All three are relatively small.
The new core capital requirements were announced by the government in February.
The Spanish central bank says it has spent euro7.5 billion ($10.2 billion) in recapitalizing the three now nationalized banks and in restructuring the wider financial sector.
Unnim, for instance, has received nearly euro1 billion in capital injections and loans from the government.
As Europe's sovereign debt crisis bit deep, the government started encouraging Spain's troubled cajas to merge, seeking strength in numbers. The worry was that if the sector collapsed, Spain would have to foot the bill and run the risk of becoming the latest euro zone country to need an international bailout.
Friday was the deadline for banks to raise their core capital ratios, to 8 or 10 percent depending on how a given entity is structured and if it listed or not. Cajas are not listed.
"Today, Sept. 30, the required timetable was complied with and all banks comply with the level required," central bank governor Miguel Angel Fernandez Ordonez.
He said two other banks _ Liberbank and Banco BMN _ were given nearly another month to raise more capital.