The European Central Bank said on Monday it was carrying out an inspection of Banco Popular (POP.MC) as part of its regular Supervisory Examination Programme. It said the inspection was ongoing and had not concluded.

The Spanish bank is considering a large capital increase or a merger as it seeks to lift the burden of around 37 billion euros ($40.5 billion) of toxic real estate from its balance sheet.

Popular executives this month said the bank was under no pressure from regulators and that its banking business was performing well.