First Spanish commercial bank bail-out

Banco de España has injected €1bn into the bank from rescue fund Fondo de Reestructuración Ordenada Bancaria, and established a further €2bn credit line to finance its most immediate payments.

It has replaced the bank's management after evaluating the bank and deciding that managers had "failed to adopt adequate measures to secure its viability." According to the central bank, Banco de Valenica accounts for 0.74% of total assets in the Spanish banking system.

The intervention came after Banco de Valencia failed to issue its scheduled September report, and represents the first Spanish commercial bank bail-out since the start of the subprime mortgage and sovereign debt crises.

It is, however, the fourth financial institution to be rescued in the country, predated by savings banks Castilla-La Mancha (2009), CajaSur (2010), and Caja de Ahorros del Mediterráneo (2011).

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• Southern Europe
• Spain