Spain’s decision to force lenders to meet stricter capital rules or risk state ownership will provide a boon to bankers and lawyers helping them raise funds with stock market listings and asset sales.

Spanish banks may raise as much as 20 billion euros ($27.3 billion) by selling stock in initial public offerings and reducing their stakes in publicly traded companies in the next two years, according to bankers working on the plans. That’s after stock sales across all industries in Spain raised about 13 billion euros in the past two years, Bloomberg data show.

“It is going to be a heap of work for a few legal firms and investment banks to do,” said Pablo Bieger, a partner in banking and finance at Clifford Chance LLP’s offices in Madrid who has assembled a force of 23 lawyers to work on business resulting from the rules. “There’s going to be a kind of bottleneck.”

Finance Minister Elena Salgado confirmed on Feb. 18 that lenders without a stock exchange listing will have to boost core capital levels as high as 10 percent. She provided some leeway by giving them until the end of the first quarter of 2012 to carry out IPOs, after stating last month that the banks would have to meet the capital rules by “autumn.” The savings bank association pushed for more time.

Salgado is seeking to convince investors the country’s banking system can absorb losses from the property crash without overburdening public finances. The rules require publicly traded banks to have core capital, a measure of financial strength, of at least 8 percent.

“At this point, being transparent about the quality of loans and real estate seems much more important than setting rules on capital that may be difficult to meet from a practical point of view,” said Luis de Guindos, a former deputy finance minister in the government of Jose Maria Aznar and a professor at Instituto de Empresa business school in Madrid.

Even with the extra time, the rush to complete mergers between many of the savings banks, known as cajas, reorganize them into commercial banks and persuade investors they are attractive investments may prove difficult.

Roland Berger Strategy Consultants, which provides advice on management, aims to increase its team in Madrid to about 55 people from 40 at present to handle consulting work it expects from cajas seeking capital, said Ricardo Wehrhahn, a partner.

“There’s going to be a lot of activity that will start immediately,” he said in a phone interview.

Bieger at Clifford Chance, the No. 3 legal adviser on Spanish mergers in the past decade, estimates there are about 200 lawyers in Spain qualified to take on the looming work of helping cajas with their IPOs, enough to form about 20 teams to work on the transactions. Each IPO would need a separate legal team for the seller and the investment bank, meaning there’s a risk resources may get stretched, he said.

Investment banks are already working with cajas on aspects of the reorganization. Nomura Holdings Inc. advised Caja de Ahorros del Mediterraneo in a four-way savings bank merger, as well as Caja Murcia, which combined with Caja Granada, Caixa Penedes and SA Nostra.

International securities firms are poised to take leading roles having dominated the market for stock sales over the past two years, data compiled by Bloomberg show. U.S. firms JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc. were the top three underwriters in the period, ahead of another eight foreign firms, the data show.

Morgan Stanley ranks first among merger advisers in Spain for 2009 and 2010, followed by Banco Santander SA, Spain’s biggest bank, and Deutsche Bank AG.

Cajas are already responding to the call to boost capital. Banco Financiero y de Ahorros, the lender formed from the merger of seven savings banks led by Caja Madrid, said last month it would seek a stock market listing after recognizing 9.2 billion euros of impairments. In a Feb. 17 statement, the company said it might hive off assets to make itself more attractive to investors. (Bloomberg)