Banco Popular, regarded as the weak link in Spain's banking sector, is to replace Chairman Angel Ron after shareholders rebelled over his lacklustre progress in cleaning up 30 billion euros in toxic assets. As David Pollard reports, Popular's shares rose following the announcement and after a report that the bank was in talks over a possible merger with BBVA.
Times have been tough for Spanish banks. The sector shrinking by almost two thirds since a property market collapse in 2008. Even with that, there could be room for Banco Popular and others to merge. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "It's actually being actively encouraged by the regulators, the European Central Bank being the obvious example. Mario Draghi has a number of times suggested that Europe is over-banked, Spain is over-banked, and that it needs some of these big banks to consolidate and minimise their costs." Banco Popular has already held talks with larger rivals Sabadell and Caixabank. This time, BBVA is - reportedly - in the frame - though neither commented. But while they be a match - Popular and its chairman no longer are. Angel Ron to be ousted by a board unhappy at his progress in cleaning up toxic assets. Thirty billion euros worth related to property - according to Standard & Poors. But: merging to cut costs has its detractors. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "What happened in the history of the Spanish banking sector is that there was a series of mergers that led to these big banks, and what happened there is rather than having a lot of small, disaggregated problems, it became one big problem." Emilio Saracho - currently vice-president at JP Morgan Chase - is the likely replacement. The news driving Popular shares up 12 per cent - welcome relief after a decade that's seen them lose 95 per cent of their value.