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Top Spanish banker says private investors won't back bad bank
MADRID (Reuters) - The chairman of one of Spain's healthiest banks, the Basque lender Kutxabank, has delivered a significant blow to the government's chances of persuading private investors to take a stake in the country's bad bank.
Mario Fernandez, one of Spain's most senior bankers, said it was "unthinkable" that private investors would take a stake in the short term, adding to the skepticism voiced last month by BBVA chairman Francisco Gonzalez.
The government hopes that private investors will own at least 55 percent of the entity created as a condition to access 100 billion euros ($130 billion) of European aid for the sector.
"It seems to me that in the short-term, and I hope I'm wrong, that to even think about private capital is an unrealistic assumption unless the price is rock-bottom," Fernandez said in an interview with newspaper Cinco Dias.
"In that case, it's possible that some investors would make a three or four-year bet, after getting a good bargain that would bring some profit."
Economy Minister Luis de Guindos was in London on Thursday to drum up interest in the bad bank among investors, but Fernandez's comments show that he faces challenges in convincing domestic investors to part with their cash.
De Guindos told an audience at the London School of Economics that he was convinced that Spain would be able to attract private investors to the venture.
The bad bank will take on soured property assets from Spanish banks left with an estimated 184 billion euros in bad loans and repossessed property after the property market bubble burst in 2007.
Banking sources told Reuters last month that assets would be transferred into the bad bank at an average discount of 45 percent to 50 percent, while investors are demanding discounts of 50 percent and beyond.
Kutxabank is one of the seven Spanish banks found by Oliver Wyman's independent stress test of the financial system to have enough capital to ride out a severe and prolonged recession. ($1 = 0.7689 euros)
(Reporting by Clare Kane; Editing by Julien Toyer and David Goodman)
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