The ‘Caja Mediterranea’ (CAM) has asked the government for help after a planned merger fell through last week. The savings bank based in the province of Alicante has asked for 2,800 million euros which would allow it to meet the current requirements under law for a savings bank to have capital funds of at least 10%. The province of Alicante is one of the worst hit areas following the crash in Spain’s property market.

The merger would have gone ahead with the state backed ‘Banco Base’. However, last Wednesday three of the partners in ‘Banco Base’ pulled out of the deal. Although a spokesperson for the CAM says that it is now going it alone the bank has not ruled out the possibility of other collaborations in the future with partners who share with their philosophy of transparency.

According to the CAM it will now be able to pass the ‘stress test’ that Spanish banks have to pass since the banking crisis began. It has also decided to transfer all its financial dealings to a bank so that money from the state restructuring fund can be used to rescue the ailing savings bank.

From now on the CAM will take an active part in the process of the restructuring of Spain’s banks and the reinforcement of capital funds. The Cam says that it ‘believes that the injection of state funds into its capital base, its potential and wide commercial base together with its experience in the markets gives it a sufficient base to consolidate this project’.

A spokesperson for the bank says that now it is in a similar position to other savings banks that have also had to ask for help from the state restructuring fund.

The Spanish government now needs to demonstrate that its banking system is solvent in order for international markets to have more confidence in its banks. However, shares in Spain’s banks fell by 2% last week.