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Banco Popular is solvent, chairman says

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Banco Popular is solvent, chairman says

Banco Popular Español SA Chairman Emilio Saracho reassured his executives that the lender is solvent and has positive equity, Reuters reported June 3, citing a letter to staff.

Banco Popular shares have been rocked in recent days amid worries about the lender's ability to find a buyer or raise fresh capital to resolve its €37 billion of nonperforming real estate assets. Saracho is set to meet ECB officials June 6, a "source familiar with the meeting" told Reuters, adding that the meeting had been scheduled for some time and was part of the central bank's routine oversight process.

However, "people familiar with the matter" told Bloomberg News that Popular could request new loans from the ECB during the June 6 meeting. It may also ask for ECB oversight to help its board make decisions should the loans not be approved to support liquidity, one of the sources added.

The Spanish government on June 2 called for calm about Banco Popular's future. Spanish press has named Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA and Bankia SA as likely buyers, although a June 2 report in Spain's El Economista suggested that the latter two had dropped out of the running.