Santander not interested in mid-size Spain banks

CERNOBBIO, Italy (Reuters) - Spain's Santander (SAN.MC) is comfortable with its position in the domestic banking market and is not interested in buying mid-sized banks, its chief executive said on Friday.

"We are in a good position. We need no extra capacity in Spain," CEO Alfredo Saenz told Reuters on the sidelines of a financial conference in response to a question on whether the country's largest bank is eyeing opportunities at home.

Last Sunday, the Bank of Spain intervened in savings bank Caja Castilla y la Mancha, the first bailout in Spain since the global financial crisis began, after a planned merger with Andalusian savings bank Unicaja failed.

On Tuesday, Bank of Spain Governor Miguel Angel Fernandez Ordonez said the central bank might have to support other more small and medium-sized banks if the global crisis dragged on, and it would continue to promote private solutions including mergers.

Spain's banks have largely weathered the global financial storm so far due to strict oversight by the Bank of Spain and their unique provisions buffer.

But accelerating asset deterioration as a result of a steep property downturn after a 10-year boom and soaring unemployment has sparked a sharp rise in bad loans and talk of consolidation, particularly amongst mid-sized institutions.

On the current situation affecting Spain's banking sector, Saenz said it was "tricky" but declined further comment.

Santander's shares were flat at 1314 GMT, as were those of mid-sized bank Pastor (PAS.MC), Popular (POP.MC) and Sabadell (SABE.MC), compared with a 0.86 percent rise on the DJS banks index (.SX7P).

(Reporting by Stephen Jewkes; writing by Judy MacInnes; editing by John Stonestreet)