What's Next for Troubled Spanish Lender Popular: QuickTake Q&A

Time is running out for Banco Popular Espanol SA and its efforts to fix a balance sheet loaded with toxic property assets. The Spanish bank’s admission that it’s short of capital and may seek a buyer sparked a collapse in investor confidence that caused its market value to shrink to well below the value of its last share sale in 2016. The troubled lender is exploring ways to bolster its cash and short-term funds and may request additional central bank loans, a person familiar with the matter has said.

It looks bad. The bank’s shares fell 44 percent over three consecutive trading days through June 5. Investors are questioning whether Chairman Emilio Saracho’s rescue strategy is feasible and whether there’s still time to carry it out. Saracho wrote to senior staff to assure them that Popular remains solvent. It’s unclear what damage the turmoil has already had in terms of driving away depositors.