Spain's Banco Popular has called a board meeting to approve a capital increase of up to 2 billion euros ($2.57 billion), newspaper El Pais reported on Sunday.
The bank was highlighted in an independent audit by Oliver Wyman as one of the banks that would need extra capital to ride out a serious economic downturn. The report on Friday said that Spanish banks will need a total of 59.3 billion euros in extra capital in such a scenario.
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The board meeting would examine the capital increase and suspension of dividend payments, El Pais said without citing a source.
Spanish newspaper ABC cited market sources as saying that the bank was looking at an increase of 1.6 billion euros and would present the plan by October 15.
Popular declined to comment on the reports.
The Oliver Wyman report said that Popular was estimated as having capital needs for 3.2 billion euros under the adverse scenario, which is looking increasingly likely with Spain in its second recession in three years and a quarter of all workers unemployed.
Spain has agreed a credit line that could provide up to 100 billion euros in European Union rescue funds for its banks. ($1 = 0.7773 euros)
(Reporting By Paul Day; Editing by David Goodman)