The nation's fourth largest bank, Bankia, the country's largest real estate lender, estimated it needed $23.7 billion to survive, a sharp jump from an estimate of $11.2 billion offered Wednesday by Spanish Finance Minister Luis De Guindos, The New York Times reported.
The government spent $5.6 billion on the bank two weeks ago, taking over 45 percent and sending a signal to the international community Spain may not be able to shoulder the cost of a financial system rescue by itself.
Trading in Bankia shares were suspended Friday morning as regulators anticipated a dramatic reaction to the bank's request, which had been expected.
The British newspaper The Guardian reported Friday some analysts estimate it will take $62 billion to $130 billion to keep the country's banks from collapsing under the weight of massive mortgage defaults.
Goldman Sachs, the Financial Times reported, has been hired by Spain to advise the country on developing a recapitalization plan.
On Friday, S&P reduced the credit rating at Bankia, Bankinter and Banco Popular Espanol to junk status. Credit ratings at Banco Financiero y de Ahorros and Banca Cívica were also cut, but not that far.
S&P also said nine other Spanish banks had would keep their current ratings, but the outlook was negative, which implies they will be reviewed again in the near future.