Spain's Banco Popular Espanol and France's Credit Mutuel-CIC have entered into a strategic alliance to set up a joint banking platform in Spain and cater to each others clients in their main markets.

Under the terms of the alliance, Banco Popular will give Credit Mutuel customers access to banking services through its Spanish and Portuguese network, while Credit Mutuel will do the same for Banco Popular customers in France and Germany. Banco Popular has some 2,300 branches, while Credit Mutuel has more than 4,000.

Banco Popular is injecting 123 branch offices from its current network in Spain into the new vehicle, while Credit Mutuel will invest EUR312m in the joint venture in exchange for a 50% stake.

As part of the deal, Credit Mutuel will also buy a 5% stake in Banco Popular.

The new bank will have shareholder funds of EUR258m, assets of EUR2bn and deposits of EUR1.7bn. It would also have an initial workforce of 505.

Banco Popular in a in a regulatory filing said: “Its wide-ranging agreement with Credit Mutuel –which covers services in France, Spain and Portugal – would also provide a growth platform. The new bank will take advantage of growth opportunities in the Iberian financial market, by participating in the current banking sector restructuring.”