UPDATE 2-Sabadell says will invest in Spain's bad bank

Fri Nov 30, 2012 1:38pm EST

Related Topics

* Sabadell follows Santander as bad bank investor

* BBVA still considering investment

* Private investors have until end-Dec to get on board

By Jesús Aguado

MADRID, Nov 30 (Reuters) - Spain's fifth-biggest bank Sabadell said it intended to become a shareholder in Spain's bad bank, created to siphon off bad property assets from lenders as a condition of receiving European aid.

"We will definitely hold an equity stake in the bad bank," Chairman Josep Oliu said on Friday.

Sabadell is the latest healthy Spanish listed bank to show it is willing to support the entity created to clean up the aftermath of a 2008 property crash after Santander said earlier this month it intended to invest in the bad bank.

Spain's second-biggest bank BBVA is still considering whether to make an investment, a company spokesman said on Friday.

Government sources have said the bad bank, which technically launches on Friday, could go ahead with backing from domestic investors alone, but foreign investors would give it credibility.

The reaction of private investors, both domestic and international, to the bad bank has been positive, the Economy Ministry said in a statement on Friday.

The bad bank is now ready to begin receiving 45 billion euros in soured real estate assets from the four nationalised lenders, though these are unlikely to be transferred until the end of December. The equity part of the bad bank will initially be around 3.5 billion to 3.9 billion euros.

Private investors also have until the end of December to invest in the equity.

In a second stage, after including the assets of a further group of lenders in need of public aid, the total assets could increase to 60 billion euros.

The equity portion will swell to 5 billion euros and the government hopes international investors will buy up to 10 percent or 500 million euros of this.

International investors will have until the end of March to invest in the bad bank, bankers say.

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