LONDON – Britain's Barclays will invest in Spain's so-called 'bad bank' as a signal of its commitment to helping fix the country's banking troubles, a person familiar with the matter said on Friday.
Spain has set up the bad bank, known as SAREB, to take toxic property assets from banks' balance sheets so they can lend more to individuals and businesses. Its creation was a condition for Spain to get money from Europe to clean up its financial sector after a 2008 property crash.
The country is looking for private sector investors to stump up 2.2 billion euros ($2.9 billion) by the end of December to ease the burden on state coffers.
The source did not disclose how much Barclays was likely to put in. Barclays is one of the biggest overseas banks in the country, with 430 branches, though it has been shrinking there after suffering hefty losses on loans.
Spanish banks Santander and Sabadell and insurers Mapfre and Mutua Madrilena have said they will invest in the bad bank, and French insurer AXA said it was in talks to invest.
($1 = 0.7700 euros)
(Reporting by Steve Slater; Editing by Will Waterman)