Spain's Banco Popular denies it is looking for rapid sale

MADRID (Reuters) - Spain’s struggling Banco Popular denied on Thursday it was urgently seeking to be taken over, after a Spanish news site reported it had hired JPMorgan and Lazard to find a buyer.

FILE PHOTO: Spain's Banco Popular logo is seen during the bank's results presentation in Madrid, Spain, July 29, 2016. REUTERS/Juan Medina/File Photo

Popular, which is still burdened with a large exposure to Spain’s property market nine years after a real estate collapse, said in a statement that its strategy had not changed and that it was exploring a series of options, including a possible capital increase.

New Chairman Emilio Saracho, brought in earlier this year to try and draw a line under the bank’s troubles, had already said in April that Popular may consider raising more capital or a merger deal.

The bank said on Thursday that it was touch with various advisors in this context. It did not name them.

Online newspaper El Confidencial earlier in the day reported that Saracho mandated JPMorgan and Lazard last week to advise Popular on a rapid sale.

It said the bank had reached out to rival Spanish lenders, telling them it urgently needed funds - which Popular said it “categorically denied”.

Lazard and JP Morgan declined to comment.

“The bank’s strategy ... has not changed, and the bank is working on its development, which could include a potential capital hike or a corporate deal,” Popular said.

The lender is straining to clean up its balance sheet after a property market collapse in 2008 which hit Spain’s banks and caused steep losses for many.

The financial sector has largely recovered but Popular still has the biggest exposure to property assets among Spain’s main listed banks.

It has undergone three leadership shake-ups since last July and reported a 3.6 billion euro ($3.9 bln) loss for 2016, its biggest ever.

Saracho was formerly at JPMorgan, and joined Popular in February. The bank also hired a new chief executive in April, Ignacio Sanchez-Asiain.

The two have outlined plans to sell off non-strategic assets, including Popular’s Wizink credit card business, after Popular raised 2.5 billion euros in a capital increase last year.

In the lender’s first earnings under Saracho, Popular booked a 137 million euro loss in the first quarter as it battled to clean up 37 billion euros of toxic real estate assets.

Popular shares closed down 6.6 percent on Thursday after surging 27 percent over the previous five days.

They have been the worst performers on the European STOXX banking index in the last year, tumbling 57 percent.

Reporting by Jesus Aguado, Carlos Ruano and Sarah White, Writing by Sarah White; editing by Susan Thomas and Susan Fenton