November 19, 2014 / 12:16 PM / 4 years ago

UPDATE 1-Spain's banks will need more capital, but have solid base - central bank

(Adds details, further quote)

MADRID, Nov 19 (Reuters) - Spain’s banks will need to keep raising capital to meet regulatory demands over the next few years but the country’s lenders are starting from a solid base, Bank of Spain Governor Luis Maria Linde said on Wednesday.

“Our banks need more capital, and this will be an important matter in the next few years, but the starting point is good,” Linde told legislators in the upper house of Parliament.

Spain’s banks are emerging from a crisis, sparked by a 2008 real estate market crash, and have since returned to profit. The weakest lenders needed a 41.3 billion-euro ($52 billion) bailout from Europe two years ago to rebuild their capital.

That, and a broader restructuring of the financial sector, helped Spanish banks score well in recent health checks by the European Central Bank, Linde said. Only one small bank out of 15 examined was shown to lack capital at the end of 2013.

But he added the sector still faced challenges.

“(The sector) faces new regulatory norms ... and in that sense, further reinforcements of capital are always welcome,” Linde later told reporters.

The central bank governor also called for increased efforts in Spain to cut the government deficit.

1 U.S. dollar = 0.7973 euro Reporting by Sarah White; Editing by Paul Day and Mark Potter

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