Mid-sized retail bank Sabadell has made a bid for the Alicante-based bank, a source close to the operation told Reuters. CaixaBank has written to the central bank asking if it can buy some of CAM's assets, another source said. 

The Bank of Spain took over CAM in July. Losses are snowballing at the regional bank, which was highly exposed to the property boom and bust on Spain's eastern coast, littered with unsold holiday apartments. 

The stability of Spain's financial system is at risk as a deepening euro zone crisis shuts money markets for banks and a debate rages about whether lenders should take a hit on worthless property assets sitting on their balance sheets. Spanish newspaper ABC said fellow regional savings bank Ibercaja and US fund JC Flowers had also made bids. JC Flowers declined to comment on Friday.

Sabadell and CaixaBank declined to comment on the matter. Santander and BBVA, Spain's two biggest banks who had been tipped as possible buyers for CAM, also declined to comment.

The Bank of Spain injected a total of 5.8 billion euros ($7.8 billion) of state funds into the 135-year-old bank with a view to a sale. Losses have ballooned at the bank following the intervention. The central bank fired one CAM director when it took over the lender and put her under investigation for fraud.