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Spanish banks vie for Fonitel

Spain's biggest banks are gearing up for a battle to manage the country's biggest pension fund.

Banks Argentaria and Caja de Madrid have seriously considered buying Fonditel - the vehicle set up to manage the pensions assets of telecommunications giant Telefonica, according to a report in El Pais, which cites sources from the companies involved and trade unions.

The two banks are among Telefonica's shareholders. Other banks, Banco Bilbao Vizcaya, La Caixa, Banco Santander and Banco Central Hispano Americano, are reported as set to enter the fight for Fonditel, which is worth about Pta11bn, according to a report by consultant MeesPierson. Telefonica's pension fund holds more than Pta370bn ($2.5bn) in assets, and the pension scheme has 67,000 members.

We are interested like any other bank because Fonditel is the biggest pension fund in Spain," a source from one of the banks told IPE. "Of course it depends on the price they decide on. It seems that they are trying to sell it... they are a big company and this is not one of their core activities."

Telefonica president Juan Villalonga in July announced a decision to "professionalise" the management of the fund. The fund is managed by Fonditel which was created for the purpose. Management of Telefonica controls 81% of Fonditel, with the remainder in the hands of trade unions UGT and CC OO.

One financial source said the unions may scupper the chances of any sale by refusing to sell their stake in Fonditel. Argentaria, thanks to its bulk and government-owned status, would be the most likely buyer if the pensions vehicle were put up for sale, he added."

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