La Caixa, the second-biggest Spanish
savings bank, may shift its banking business to Criteria
CaixaCorp SA, its publicly traded holding company.

The boards of the two companies will meet today to analyze
and possibly approve such a step, Barcelona-based Criteria said
in a filing to regulators today. They’ll make an announcement
later on any decision, Criteria said.

Shifting the banking assets to the holding company would
open up new avenues to raising capital, even though its solvency
levels are already strong, said Cesar Molinas, an independent
consultant and former head of European fixed-income strategy at
Merrill Lynch Co., in a phone interview. Spain’s government
wants savings banks to find ways to raise private capital to
address investor concerns about the health of the banking
system.

“It looks like very good news,” said Molinas. “The most
exemplary of the cajas is adopting the model put forward by the
government and will be seen to be leading the way.”

La Caixa, which has about 275 billion euros ($377 billion)
of assets, had a 13 percent decline in profit to 1.23 billion
euros during the first nine months of the year. The bank’s core
capital ratio was 8.6 percent in September, above the 8 percent
threshold the government this week told publicly traded lenders
to meet by September.

Criteria Holdings

La Caixa sold shares in Criteria in 2007 to help it drive
growth beyond Spain. The holding company had stakes valued at
22.8 billion euros in September, including about 36 percent of Gas Natural SDG SA, 25 percent of Abertis Infraestructuras SA
and 5 percent of Telefonica SA.

Criteria has boosted the weighting of banking in its
investments, buying 20 percent of Grupo Financiero Inbursa SA, a
financial-services company controlled by Mexican billionaire
Carlos Slim. Other financial investments include Hong Bank of
East Asia Ltd. and Austria’s Erste Group Bank AG.

Spanish Finance Minister Elena Salgado said this week that
Spanish lenders that aren’t publicly traded and depend on
wholesale debt markets will need core capital levels of as much
as 10 percent.

To contact the reporter responsible for this story:
Charles Penty at
cpenty@bloomberg.net

To contact the editors responsible for this story:
Frank Connelly at fconnelly@bloomberg.net;
Edward Evans at eevans3@bloomberg.net.