MADRID, March 3 (Reuters) - The head of Goldman Sachs ( GS )

in Spain and Portugal, Olaf Diaz-Pintado, will retire

this summer and be replaced by two internal executives to allow

for an orderly transition, according to an internal memorandum

seen by Reuters.

Diaz-Pintado, who has worked at Goldman Sachs ( GS ) for 26 years,

was responsible for the expansion of the investment banking

franchises in Spain and Portugal.

In Spain, Goldman Sachs ( GS ) is advising Sabadell in

its defence strategy against BBVA's hostile takeover

bid worth more than 12 billion euros ($12.60 billion).

In its memo sent to staff on Monday, Goldman Sachs ( GS ) said that

Juande Gomez-Villalba and Gloria Carreno will assume additional

responsibilities as co-heads of investment banking in Spain and

Portugal upon Diaz-Pintado's retirement.

Gomez-Villalba and Carreno will work with Jorge Alcover, who

will continue to lead Goldman Sachs' ( GS ) debt financing activities

in Iberia and client coverage responsibilities in Portugal.

($1 = 0.9527 euros)

(Reporting by Jesús Aguado)