* New chairman says open to merger deal
* Bank in no position to pay dividends, is short of capital
* Shares close down 9.6 pct to record lows
* Ignacio Sanchez-Asiain named as the bank's new CEO
(Adds appointment of new CEO in paragraph 3)
By Jesús Aguado
MADRID, April 10 Spain's struggling Banco
Popular is looking at a another capital hike to clean
up a balance sheet weighed down by billions of euros in toxic
assets and would consider a merger deal, its new chairman said
Speaking publicly for the first time since he took over,
Chairman Emilio Saracho sought to draw a line under the
management of his predecessor, Angel Ron, who was ousted by
shareholders last December.
On Monday afternoon, he named a new chief executive, Ignacio
Sanchez-Asiain, a senior banker who worked at Spain's
second-biggest lender BBVA, in the third leadership
shake-up since last July.
Saracho said Popular likely needed more capital after
raising 2.5 billion euros ($2.6 billion) last year, and would
not rule out a merger as the solution to coping with its 36
billion euros of non-performing real estate assets.
Higher than expected charges on these loans have eroded the
bank's capital position, prompting 3.5 billion euros in losses
for last year and fuelling talk it could be a takeover target.
"Under the right conditions, we could go to the market and
ask investors for additional capital, or, eventually, we could
participate in a round of consolidation," Saracho said.
Part of Popular's value came from its independence, Saracho
said, but that did not mean the bank would not consider a deal
that recognised the value of its brand.
Saracho's comments drove Popular's shares to a record low,
closing down 9.6 percent. The shares are the worst performers on
the European STOXX banking index over the past year,
falling almost 60 percent against a 30 percent rise in the
Saracho, a former JPMorgan vice-president, said Popular
would work on selling off non-strategic holdings and was in no
position to pay shareholders dividends due to its shortage of
Analysts said these non-strategic assets included its Wizink
credit card business and Totalbank franchise in the United
Under Ron, Popular was planning to hive off 6 billion euros
of its property assets into a separate division to help reduce
its non-performing real estate portfolio by 15 billion by 2018.
Saracho did not mention the plan directly, but said he did
not like "complex structures" to generate capital and the lender
would continue to work on selling off real estate assets.
Popular's problems mounted last week when it said it would
revise its 2016 results and sources said it might book
additional losses of around 240 million euros as a result of an
Small investors voiced their anger about the accounting
corrections and some demanded an investigation. "The solution is
... to clarify what has happened," one of them, Maria Flora Ruiz
Nunez, said at the event.
Board secretary Francisco Aparicio Valls said the changes to
accounts were due to technicalities and were not intended to
($1 = 0.9454 euros)
(Writing by Angus Berwick; Editing by Julien Toyer and Mark