WRAPUP 3-Spanish savings bank La Caixa to get share listing

* Spain raises 3 bln euros for bank restructuring

* La Caixa to fold bank business into listed unit

* Plans 1.5 bln euro convertible bond issue

* Says to have pro-forma core capital of 10.9 pct

* La Caixa to own 81 pct of new CaixaBank

(Releads with details of La Caixa overhaul, capital plan)

By Sonya Dowsett and Jesus Aguado

MADRID, Jan 27 (Reuters) - Spain's La Caixa took a major step forward in the wider overhaul of the country's savings bank sector on Thursday, setting out plans to boost its capital and become a listed bank.

Spain's regional savings banks -- known as cajas -- are under pressure from the government of Prime Minister Jose Luis Rodriguez Zapatero to find more cash from investors as he seeks to stamp out fears of an Irish-style EU-backed bailout.

La Caixa said it would create a new listed bank, CaixaBank, in which it will have 81.1 percent through the injection of the main savings bank into the already listed industrial holding company Criteria.

After the sale of 1.5 billion euros of convertible bonds, CaixaBank will have a core capital adequacy ratio of 10.9 percent of assets, La Caixa said.

This would be well above the 8 percent level demanded of all the cajas by Zapatero. They have until September to do this or risk part nationalisation by the Socialist government. [ID:nLDE70N1M0]

Spain's overhaul of its banks was stepped up a gear earlier on Thursday with the state raising 3 billion euros ($4.1 billion) in fresh funds to help the weaker ones.

Barcelona-based La Caixa, founded over 100 years ago, is one of Spain's biggest and strongest banks. Unlike many of the regional banking groups it is seen by analysts as being in a relatively strong position to attract private cash and is therefore expected to lead the way for its weaker brethren.

The savings bank sector, which makes up about half of Spain's banking system, badly needs capital to help soak up bad loans, bankrupt debtors and falling property prices.

Spain has estimated there could be a shortfall of up to 20 billion euros on savings banks' balance sheets, but economists' estimates are as high as 120 billion euros ($165 billion).

The state-backed restructuring fund, known as the FROB (Fund for Orderly Bank Reconstruction), issued a three-year bond, paying a premium above sovereign debt. [ID:nWLA3885]

The syndicated issue, backed by the Spanish government, was sold at 220 basis points above mid-swaps, or around 80 basis points above the equivalent sovereign bond.

The risk premium on Spanish debt ES10YT=TWEB rose slightly to 214 basis points over the German benchmark DE10YT=TWEB.

"More should be issued of course, the problem is the 20 billion itself may just not be enough," said Barclays Capital economist Antonio Garcia Pascual, who estimates the Spanish banking system needs 46 billion euros in recapitalisation.

"But market conditions may not support a major issuance by the FROB of the full amount that is actually needed," he added.

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ANALYSIS on cajas' quest for capital [ID:nLDE70K12U]

FACTBOX on Spanish core capital ratios [ID:nLDE70O08G]

Graphic on Spanish bad loans: r.reuters.com/qac47r

Reuters BREAKINGVIEWS column [ID:nLDE70I1IT]

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STAR SHOW

La Caixa, whose star logo was designed by Catalonian artist Joan Miro, has 5,300 branches and employs 27,000 staff. It had a core capital ratio of 8.7 percent in September, greater than Spain's two biggest banks Santander (SAN.MC) and BBVA (BBVA.MC).

Spain's 17 savings banks -- the number left after a round of forced mergers last year -- date back hundreds of years and have often been used by local politicians to fund pet projects.

The banks have gone on road shows in Europe and the United States to try to find new investors without success thus far.

The Bank of Spain has estimated the banks' potentially problematic exposure to the country's real estate and construction sector stood at 181 million euros at June 2010.

Afer La Caixa's overhaul analysts expect the focus to turn to the savings bank merger being led by Caja Madrid to create Spain's third-biggest bank by assets. It reports its 2010 results on Monday.

It tops the list of Spanish banks and cajas in terms of exposure to potential losses on property development loans, according to Evolution Securities. ($1=.7296 euros) (Additional reporting by Tracy Rucinski, Fiona Ortiz and Nigel Davies in Madrid, Alex Chambers of IFR in London; Writing by Alexander Smith. Editing by Greg Mahlich)