MADRID, Nov 2 (Reuters) - Bad debt levels in Spain will rise close to 9 percent of banks' loan books, Sabadell Chief Executive Jaime Guardiola said on Sunday, before adding that the Barcelona bank was alert to takeover opportunities.
Guardiola told newspaper El Pais, in an interview published on Sunday, that bad debt could approach the 9 percent level touched in Spain's last recession in 1993.
"It won't reach that level now, but it is not going to be far off," said Guardiola, before reiterating that Sabadell's proportion of bad debts would sit below the sector average.
"History shows that most bad debts are recovered," he added.
Though still low, Spain's banks are suffering sharp rises in the rate of non-performing loans as economic growth slows, particularly in the construction sector.
Sabadell's bad debt jumped to 1.59 percent at end-September from 0.85 percent three months earlier but well below the 2.44 percent for all loans in Spain according to Bank of Spain figures.
Guardiola, who joined the bank from BBVA in summer 2007, said Sabadell had proved in the past that it could make successful acquisitions, and it was logical amid the financial crisis that there would be more M&A activity.
"We are going to be alert to opportunities. But the priority is to put our own house in order. If we are strong, some opportunity will present itself, but we do not have the periscope deployed".
Asked if Banco Popular, often touted as a bride for Sabadell, was the ideal merger candidate, Guardiola replied: "I don't have the slightest idea".
The Barcelona native said Sabadell had revised its plan to open 1,800 branches from the 1,237 it currently runs. This year it would only open 10 branches, he said.
"We are not active abroad either. Our area of interest is Spain".

(Reporting by Ben Harding; Editing by Jason Neely) Keywords: SABADELL/ (ben.harding@reuters.com; +34 91 585 8530; Reuters Messaging: ben.harding.reuters.com@reuters.net)

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