Spanish banks CaixaBank and Bankia are in talks over a possible merger that would create a leading player in the country with assets of more than €650bn ($770.48bn).

The lenders said late Thursday they are discussing an all-share merger that would create the country’s third-largest bank by assets, behind Banco Santander, which is one of the eurozone’s largest banks, and Banco Bilbao Vizcaya Argentaria. The combined entity, however, would be a leading player in Spain, as the two other banks have large international operations.