Banco Popular of Spain said it is in talks to buy Citibank’s Spanish credit card and retail banking business, the latest sign that confidence is on the rise among Spain’s crisis-scarred financial institutions. In a statement to the Madrid stock market regulator, Popular declined to provide details about the timeframe or value of a deal with Citibank. Citibank is a relatively small player in the Spanish retail banking market with a network of just 45 branches. Its presence in credit cards is stronger, however, with more than 1.3 million cards issued. A move by Popular to expand its business in Spain would mark a striking turnround for a bank that was hit especially hard by the country’s post-2008 housing bust and recession. It would follow moves by lenders such as Banco Santander to bulk up their Spanish business, and come amid heightened investors interest in the country’s banks, regarded as almost untouchable less than two years ago. At the height of the crisis in 2012, Popular was one of the few banks not already nationalised that failed an EU-mandated stress test, forcing the lender to push through a €2.5bn capital increase. Last year, Popular again raised capital with the help of Mexican investors. Buying Citibank’s Spanish retail arm would also suggest that the country’s retail banking industry is primed for a new round of consolidation. The recent banking crisis has already sharply reduced the number of lenders in what used to be one of the most overbanked markets in Europe.
