An International Monetary Fund report on Spanish banks will show the country's troubled lenders need a cash injection of at least 40 billion euros ($50 billion), sources in the financial sector said.
The report, due to be published next Monday, will also outline overall needs of 90 billion euros to clean up Spain's entire banking sector, with healthy banks covering a big chunk of this sum, one of the sources said.
"The capital shortfall for the Spanish banks will be around 40 billion euros after taking into account the capacity from some of the entities to cover expected losses with their own resources," the source told Reuters.
Government sources declined to confirm the figures and one source who has been briefed on the matter cautioned that the IMF may not have finalized its estimates.
The IMF report, along with an audit of the Spanish banking sector conducted by consulting firms Oliver Wyman and Roland Berger, will help determine the size of a bailout for Spanish lenders currently being explored in Madrid, Brussels and Berlin as a way to restore confidence in Spain and the eurozone.
The country's borrowing costs have soared in recent weeks over concerns it would not be able to prop up banks hit by a property crash in 2008, and rein in its public finances.
Spain weathered funding pressures in European credit markets on Thursday and managed to raise money at an affordable if rising cost
Despite a rally in stocks, bonds and the euro owing partly to expectations of action by central banks to revive economic growth, the eurozone remains under pressure from investors and global partners to act decisively and quickly to resolve its debt crisis.
Economy Minister Luis de Guindos said on Wednesday there were no immediate plans to apply for a bailout and Spain would await the results of the Wyman-Berger audit, due by the end of the month, before taking decisions on how to recapitalize the banks.
The review is likely to show a capital shortfall higher than in the IMF report and require the banks to set aside capital to cover potential losses on mortgages and loans to businesses.
This would be in line with prudent recapitalization plans at nationalized lender Bankia as well as with recent recommendations from the European Commission in its annual assessment of the Spanish economy.
Two EU officials said the final bill was still a moving target.
"You've got bad property loans that still haven't flowed through the system, and you have a recession. All the banks' balance sheets are going to be under increased pressure in the months ahead as a result," one official said.
"When it comes to Spain, there would appear to be two ways to go: a minimalist approach in which only the bare minimum of banks are recapitalized, and a maximalist approach where you try to get ahead of the bad loans in the pipeline and recapitalize all the banks that need it," he added.
With unemployment at more than 24 percent, and the economy in its second recession in quick succession, there are concerns that the rate of non-performing loans could rise.
A group of medium-sized banks, such as Unicaja, Banco Mare Nostrum, Bankinter as well as the merger of Liberbank, Ibercaja and Caja Tres, are especially in focus as they may not be able to meet stringent new capital demands.
There are also doubts in the sector about Sabadell as well as Popular, which said on Wednesday it would set aside more capital than currently needed to ensure potential losses on mortgages and loans to businesses are covered.
Senior Spanish officials have insisted in recent days that the IMF report would show 70 percent of the banking sector is sound and can cope on its own with the current financial storm while the government had the capacity to deal with the rest.
Prime Minister Mariano Rajoy said on Saturday that nationalized lender Bankia, which has requested a 19-billion-euro rescue by the state, represented the bulk of the remaining 30 percent.
Three smaller lenders, CatalunyaCaixa, NovaGalicia and Banco de Valencia, have also been rescued by the state but financial and government sources said they were likely to need less money.
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