MADRID, July 17 (Reuters) - A deal to help compensate small investors who lost money in Spanish bank NCG Banco will result in the country's Deposit Guarantee Fund owning a 26 percent stake in the bank, NCG said on Wednesday.
This means the deposit guarantee fund, set up to protect small depositors, will have exposure to one of the banks that had to be bailed out after Spain's property crash.
As part of a 41 billion euro ($54 billion) rescue of Spanish banks last year with European funds, customers at bailed-out banks, with investments in products such subordinated debt, were forced to convert these into shares, at varying discounts.
But banks like NCG Banco and Catalunya Banc were not publicly listed so the government is using the guarantee fund, known as FGD, to pay them instead.
The fund will shortly own 603 million NCG Banco shares, or 25.57 percent of its capital, the bank said on Wednesday.
It did not say how much the guarantee fund had paid.
Spain asked the country's healthy banks to contribute 2 billion euros ($2.6 billion) to the deposit guarantee fund in March so that 300,000 investors who lost money on risky bank debt as part of Spain's banking rescues could at least get some of it back in cash.
Spain's bank restructuring fund FROB recently said it had hired BNP Paribas to look at NCG Banco's assets and lead an eventual sale of the group.
So far, FROB has struggled to dispose of some the mid-sized banks it owns, with prospective buyers asking for extra capital or protection against future losses.
NCG Banco also said on Wednesday that it was postponing the sale of its distressed asset unit, UGAS, which houses just under 20 billion euros of bad loans.
It has received interest from international investors, but the bank said it wanted to focus on selling EVO Banco, its network outside its home region of Galicia. ($1 = 0.7612 euros) ($1 = 0.7612 euros) (Reporting by Clare Kane. Editing by Jane Merriman)