CAJA MADRID started out as Monte de Piedad de Madrid, founded by the Aragon priest Francisco Piquer on 3rd December 1702. Its original aim was to attend to the demands of the neediest social classes, by means of the ceding of free loans, guaranteed with jewellery and clothes, and trying with this to lessen the abuse of money lenders.

In order to achieve this aim, Monte de Piedad de Madrid needed resources which it obtained, above all, from the capturing of cash deposits.

The Monte de Piedad de Madrid was the first practical example carried out in Spain of a credit institute. At the beginning, it was a social charity institution, backed by the Royal Patronage and private individuals who made donations and deposited money disinterestedly. El Monte did not charge interest for loans and offered terms of up to 18 months for recovery.

In 1836, the idea of charging interest on the loans first appeared in order to cover the administration expenses incurred by the activities of el Monte and to ensure the economic future of the institution. Two years later, on 25th October 1838, the Caja de Ahorros de Madrid was established, with the aim of providing a bank where the less well-off classes could deposit small amounts of money.

The link with the Caja to the Monte de Piedad did not impede the functional independence of the two institutions, as each had its own separate governing bodies. However, this financial independence led, some years later, to the merging of the two into a single company. In this way, on 22nd April 1869, the Monte de Piedad y Caja de Ahorros de Madrid was constituted. Later, and basically due to the importance that the savings bank began to acquire, the order of the name was inverted, and it became Caja de Ahorros y Monte de Piedad de Madrid.