Santander to back Spanish ‘bad bank’

Santander plans to invest in Spain’s so-called “bad bank” in a sign that healthy domestic lenders are willing to support the entity created to clean up the aftermath of a 2008 property crash.

“The bank plans on investing in the bad bank,” said a spokesman for Santander, Spain’s biggest bank.

Spain set up the bad bank to siphon off toxic real estate assets from bank balance sheets that date from the property crash. The bad bank’s creation is a condition of receiving up to €100bn of aid in a European bailout of the country’s financial sector.