The executive chairman of Spain's second-largest bank, Francisco González of Banco Bilbao Vizcaya Argentaria SA, indicated June 7 that his bank had looked at buying distressed lender Banco Popular Español SA but that the deal did not measure up to its demands.

In the biggest takeover in European banking in 2017, Banco Santander SA announced it would buy the entire share capital of Banco Popular for €1 and launch a €7 billion capital increase to boost the troubled bank's balance sheet.

BBVA had been named, alongside Santander and Bankia SA, as a possible bidder for Banco Popular in the past few months as Banco Popular's future became increasingly doubtful.

But González told a Q&A session at the MoneyConf fintech event in Madrid: "We have a different approach, so when we look at a physical asset like [Banco] Popular, you can imagine we are extremely demanding in terms of price. In terms of pricing we are extremely demanding, so you can more or less have the answer."

However, he said the takeover was "good news" for Spain.

"There was a problem in the system and that problem was fixed, good news," he said. "That proved the Spanish banking system was robust enough to fix the problem without public aid, the first time in Europe, probably in the world, that one bank is going through a resolution process without public aid."

The Santander deal will create Spain's largest bank by both lending and deposits, serving more than 17 million clients with a credit market share of around 20%.

"Santander will be the biggest bank in Spain in terms of assets, but in BBVA we have to be the first bank in terms of customer satisfaction and digital transformation," González said. "I don't believe physical banks have a bright future. Frankly, I don't believe in the conventional physical banks any more."