MADRID (Reuters) - Europe’s No. 2 insurer AXA (AXAF.PA) is looking at investing in Spain’s so-called ‘bad bank’, Chief Executive Henri de Castries said in a newspaper interview on Friday, the latest show of private sector support for the entity.
Spain has set up the bad bank, known as Sareb, to take toxic property assets from banks’ balance sheets so they can lend more to families and businesses. Its creation was a condition for Spain to get money from Europe to clean up its financial sector after a 2008 property crash.
The head of AXA told Expansion newspaper it was in talks with the Spanish government about how it would invest in Sareb, and said that the terms would have to be reasonable.
“We are interested in investing in the bad bank because we are a responsible company and it’s in the interest of all large financial institutions that the Spanish banking system returns to normality,” he said.
The bad bank will initially have equity of 3.9 billion euros ($5 billion), but Spain needs private investors to stump up 2.2 billion euros of this by end-December to keep its stake in the bank below 50 percent and reduce the burden on state coffers.
Spanish insurers Mapfre (MAP.MC) and Mutua Madrilena said earlier this month they would invest in the bad bank.
Press reports in Spain on Thursday said Deutsche Bank (DBKGn.DE) and Barclays (BARC.L), international banks with a presence in Spain, would invest in Sareb. Both lenders declined to comment. ($1 = 0.7700 euros)
Reporting By Sonya Dowsett. Editing by Jane Merriman