Banco Popular Español SA tasked Deutsche Bank with working on a potential capital increase for the troubled Spanish lender after its previous adviser, Morgan Stanley, backed down from its commitment, online newspaper El Confidencial reported.
"Official sources" from Popular reportedly confirmed to El Confidencial that Morgan Stanley was no longer working on gauging institutional investor appetite for a potential capital increase of between €4 billion and €5 billion that would take place if a planned sale of the business falls through. Previous reports that Popular had tapped Morgan Stanley as an adviser on its capital raising plans sparked concerns of conflict of interest, as the U.S. investment bank was already advising Bankia SA on its merger with Banco Mare Nostrum SA.
Representatives from the bank, however, indicated that Deutsche Bank was working on an issue not related to the potential capital increase, the online newspaper said in its June 1 report.
Meanwhile, Popular extended the deadline for interested investors to submit bids to acquire the bank from June 10 to the last week of the month, El País reported May 31. Some interested parties had reportedly expressed frustration at the speed of the bidding process.
Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA and Bankia are reportedly among those interested in snapping up the troubled lender, while CaixaBank SA is said to be analyzing Popular's confidential numbers but to be less interested than the other Spanish banks. EU Single Resolution Board Chair Elke König was reported May 31 to have warned that Popular may need to be wound down if it fails to find a buyer.