May 10, 2013 / 5:31 PM / in 4 years

UPDATE 1-Spain replaces nationalised Catalunya Banc chairman

(Adds details and background)

MADRID, May 10 (Reuters) - Spain’s FROB, the bank restructuring fund, ousted the management team of nationalised lender Catalunya Banc on Friday and said it was bringing in former BBVA executive Jose Carlos Pla as new chairman.

The management change comes as Spain’s government revises plans for how best to manage its four nationalised banks, which it wants to get off its hands as soon as possible and at a minimal cost to taxpayers.

Catalunya Banc has so far been one of the most problematic, as potential buyers, including Spain’s healthier banks, have baulked at buying it without extra state aid to cover what they argue are additional risks on its balance sheet.

Catalunya Banc already received 9 billion euros ($11.67 billion) of European aid and transferred most of its rotten property loans to a so-called ‘bad bank’ last year, and the government has so far refused to pump more funds into the lender.

It opted instead to cancel an auction earlier this year and explore the possibility of partially merging Catalunya Banc with bigger Bankia and at least one other state-owned bank, by housing them under one holding company.

Pla, who had been running CajaSur, is seen as close to Jose Ignacio Goirigolzarri, the former BBVA Chief Executive who now runs bailed-out Bankia.

Goirigolzarri has been touted as the ideal candidate to run a holding company grouping together nationalised lenders, although sources close to Bankia have described the idea as an “unexpected distraction” for the lender as it tries to get its business back on track.

“If such a holding company is created, having someone close to Goirigolzarri who can act as a sort of deputy could make sense,” one banking source familiar with the plans said. ($1 = 0.7709 euros) (Reporting By Sarah White and Tracy Rucinski; Editing by Helen Massy-Beresford)

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