Two small Spanish banks will be closely watched in the coming days after the fall of Banco Popular last week sparked fears over the strength of the sector.
Liberbank’s share price fell 41 per cent to €0.68 (60p) last week, as Santander rescued Popular by buying its rival for a nominal €1.
Meanwhile, the initial public offering (IPO) of Andalusia lender Unicaja, due this summer, could also be hit.
Read more: Santander to take over Spain's Banco Popular
The Sunday Times reported that Liberbank, which was formed in 2011 by the merger of three failed savings banks, had seen the value of its riskiest bonds collapse by 60 per cent in recent days.
Banking sources also told the newspaper that the value of Unicaja’s bonds had fallen by 15 points in the last week.
The Popular rescue deal came amid growing fears that the lender could be wound down as it struggled to find a buyer.
Popular’s share price had fallen to an all-time low, €0.32, down 65 per cent from the beginning of the year.
The Santander deal came after the European Central Bank declared that Popular was “failing or likely to fail”.
The ECB said in a statement: “The significant deterioration of the liquidity situation of the bank in recent days led to a determination that the entity would have, in the near future, been unable to pay its debts or other liabilities as they fell due.”