Catalan savings banks propose three-way merger

* Terrassa, Sabadell and Manlleu meeting Bank of Spain

* Banks say various options being considered

By Jesus Aguado

MADRID, June 30 (Reuters) - Three Spanish savings banks based in Catalonia, northeast Spain, are meeting with the Bank of Spain to propose ways of teaming up, including a possible merger, spokesmen for the banks said on Tuesday.

The project would be the first to land on the central bank's desk after Spain's government on Friday approved a 99 billion euro ($138.6 billion) restructuring fund to spur consolidation and avoid possible bank problems. [ID:nLP663772]

"The managing directors of the three savings banks are in Madrid ... to talk about different ways of collaborating," a spokesman for one of the banks, Caixa Terrassa, said. The other banks involved are Caixa Sabadell and Caixa Manlleu.

A Bank of Spain spokesman declined to comment.

Spain's 45 regionally-controlled savings banks have seen bad loans soar in the last 18 months due to their heavy exposure to the country's property sector now in a deep slump after a decade-long boom.

Dailies Expansion and La Vanguardia said on Tuesday the Catalan trio planned to present a merger project, which would also be open to other savings banks.

A Caixa Sabadell spokesman said nothing definite has been decided.

"The meeting is to see how the land lies and to have a series of conversations. But it is not the only avenue we are exploring," a spokesman for Caixa Manlleu said.

The Catalan regional authorities confirmed they are aware of the talks.

The group created from a three-way merger would be Spain's sixteenth biggest savings banks with assets of 26.8 billion, Expansion and La Vanguardia said.

The first Spanish bank rescue of the global crisis occurred in March, when the Bank of Spain intervened in Caja Castilla la Mancha after it failed to reach a merger agreement.

The three Catalan banks could seek up to 300 million euros from Spain's new Fund for Orderly Bank Restructuring (FROB) to assist them in their merger project, Expansion and La Vanguardia said.

Economy Minister Elena Salgado on Friday said there was no urgent need to use the fund but banks could need future support.

(Reporting by Jesus Aguado; writing by Judy MacInnes; editing by John Stonestreet)