The Banco Popular announced today through the Spanish Stock Market Commission (CNMV) that it was about to finalise the absorption of its subsidiary company, the Banco de Andalucia and increase its capital by 2.06%, or 2.5 million euros.

Banco Popular will acquire the Banco de Andalucía by exchanging six of its own shares for each one in the subsidiary company, giving it complete control over the bank as it did with its other susidiaries Banco de Castilla, Banco de Crédito Balear, Banco de Galicia and Banco de Vasconia in September last year.

Banco Popular, which already owns over 80% of the shares in Banco de Andalucía, proposes raising the extra capital by issuing 25.9 million ordinary shares at 0.10€ per share.

No additional capital investment has been envisaged by Banco Popular, whose intention it is to achieve a 'significant level of synergy in operating costs and increased management efficiency' by merging the two operations.

Banco Popular maintains that the fusion has been 'well received' by customers and shareholders alike, based on the success of last year's mergers and that the regional identity of the company will be retained in Andalucía.

The date of the next Banco Popular AGM has been provisionally set for June 26th.