Santander, La Caixa, and Banco Sabadell will invest in Spain's 'bad bank', known by its Spanish-language acronym 'SAREB', Europa Press has reported.

The amount to be invested by each bank has not yet been determined and will depend on whether BBVA participates as well. The Basque bank is studying the option.

SAREB will have €5bn in capital with €1bn of direct capital and the remainder in subordinated debt.

Sources from Banco Santander have confirmed that the entity will be among the bad bank's domestic investors.

La Caixa has not commented on its participation and Banco Sabadell said that it has not yet formally received a proposal.

"Once proposed to us, we will study the option and make a decision based on what it best for our entity and also what is best for the overall Spanish financial system," said Sabadell.

BBVA said that it would act in the best interest of its shareholders and partner entities.

MJ

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