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Banco Popular Español SA is under increasing pressure to speed up its plans to find a buyer or raise capital if it wants to regain market confidence, according to industry observers.
The bank's shares tumbled to historic lows June 1, while its riskiest debt fell to distressed levels amid concerns about its ability to turn itself around.
Fears over the bank's capital position have been growing in recent months due to heavy losses as it had to provision against bad real estate loans. Concerns were heightened after a May 31 Reuters report stated that the Single Resolution Board had issued "an early warning" about the bank and that it may need to be wound down if it cannot find a buyer. The bank watchdog denied the report.
"The SRB never issues warnings about banks; preparing and drafting resolution plans is our usual and daily core task," it said in a statement on its website.
However, Popular's shares fell almost 20% at one point June 1, as investors became increasingly nervous about the bank being wound down.
'No time to lose'
"Popular is facing...