SPAIN - BBVA has cemented its position as the leading pension fund manager in Spain with a major mandate to run public sector pensions.

A syndicate led by the bank has been chosen to run the pension scheme for civil servants in the General State Administration, the Ministry of Public Administration has announced.

The scheme will be run by Management of Pensions and Provision a joint venture between BBVA and Spain's two biggest unions, the UGT and the CCOO. BBVA has 70% and the unions 15% each.

The scheme is the largest yet in Spain's occupational market. Its 530,000 participants will increase the numbers in occupation schemes overall by around 75%. At the end of March the occupation market had just 700,000 participants in total.

The plan will receive its first tranche of funding, 54.65 million euros, from the state in November. It will also receive voluntary contributions from participants.

Julio Lopez, director of retail banking at BBVA, said: "This decision reinforces BBVA's position as the leading manager of Spanish savings and its commitment to continue improving the quality of its service and advice."

He added: "We have based our offer on three pillars: the management capabilities of the group, the level of service we can provide, and our hi-tech systems."

Three other groups were short-listed alongside BBVA, La Caixa, Caser, and Fonditel, the pension fund manager for phone firm Telefonica.

Analysts say the principal benefit of the mandate is not the margin on the business itself, but the potential for cross-selling other products to half a million new clients.