MercoPress. South Atlantic News Agency

Banco Santander admits sale talks with Venezuelan gov.

Comandante Chavez now wants to try banking

Spanish bank Santander, one of Europe's leading financial institutions admitted holding talks to sell the bank it owns in Venezuela to the government. The announcement comes a day after President Hugo Chavez said he wanted to nationalize the institution which operates as Banco de Venezuela and has been in the country for over a century.

Banco Santander said on Friday it had previously talked to a group of Venezuelan private investors about selling Banco de Venezuela but had not reached an agreement. Banco de Venezuela is valued between 1.6 and 1.8 billion US dollars according to private analysts in Caracas. In a statement to the Spanish securities regulator, Santander said: "Banco Santander has thereafter become aware of the interest of the government of Venezuela in Banco de Venezuela, and is now in discussions on that". Banco de Venezuela is the country's third-largest bank in terms of deposits and the fourth measured by its credit portfolio. Chavez told a live television broadcast on Thursday he had decided to buy the Spanish bank after Santander asked for permission to sell it to a local group. I said no, I'll buy it from you -- what's it worth? We'll pay it," said Chavez, without specifying a price. "We are going to nationalize Banco de Venezuela." On Friday, Spain's Deputy Prime Minister Maria Teresa Fernandez de la Vega told reporters in Madrid that the government would not intervene because it was not a case of a forced nationalization. The Spanish government had spoken with Chavez's administration and Santander Chairman Emilio Botin over the issue, she said. "Botin told me they are going to reach an agreement," she told journalists after a news conference. According to Venezuela's Official Gazette on Friday, Chavez had used special presidential powers to decree a reform to banking laws, but no further details were available. Market speculation in June that Santander planned to sell its Venezuelan unit caused Banco de Venezuela shares to jump 25 percent on the Caracas stock exchange, but the deal was The Spanish bank owns 98.4% of Banco de Venezuela, which has deposits worth 12.3 billion US dollars. Banco de Venezuela made net profit of 290 million US dollars in 2007.