(Adds size of Mapfre investment)
By Jesús Aguado
MADRID Dec 1 Spanish insurers Mapfre and Mutua Madrilena said on Saturday they would invest in the country's bad bank, which opened its doors on Friday, in a sign of private sector support key to the project.
The two insurers did not say whether they would directly inject capital or buy debt. Mapfre said it would invest 50 million euros ($65 million) in the bad bank, while Mutua Madrilena said it would put up 30 million euros.
The government wants its stake in the bad bank, created as a condition of receiving up to 100 billion euros in European aid for its crippled financial sector, to be below 50 percent to reduce the burden on state coffers.
Lenders will transfer toxic property assets dating from a real estate crash five years ago to the bad bank, known as Sareb.
Spain's biggest lender Santander has already said it will invest in the bad bank. The country's fifth-biggest bank Sabadell said on Friday it would also participate.
Newspaper Expansion reported on Saturday that second-biggest lender BBVA would not invest in the bad bank, dealing a blow to the government, which expected support from the country's healthiest lenders.
A spokesman for BBVA said the lender "continued to study its possible participation in the bad bank". The Economy Ministry and the Bank of Spain said they had no comment on the report.
BBVA was not convinced plans for the entity made "economic sense" and wanted assurances that it would not have to make further investments at a later date if it put money into the entity, Expansion said, without citing sources.
Sareb will initially have equity of 3.9 billion euros but the government needs to raise 2.2 billion euros, or 55 percent of this, through private investors in December, according to an Economy Ministry source.
Media reports said insurers Axa, Catalana Occidente and Pelayo would also invest in the bad bank. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Irish cure no panacea for Spain: For full details on the bad bank, click on: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> ($1 = 0.7689 euros) (Additonal reporting and writing by Clare Kane; editing by Keiron Henderson)