While no decision has yet been made, the economy ministry has recently stepped up contacts with bankers over the possible sale, the sources said.

The state would probably look at selling no more than 18.4 percent, keeping a majority stake so that the bank's restructuring can be completed by 2017 as agreed with the European Union, they added.

Spain owns 68.4 percent of Bankia through the country's bank restructuring fund. At current market prices, the sale of an 18.4 percent stake would raise about 2.8 billion euros.

Bankia declined to comment while the economy ministry denied there were any talks over a Bankia stake sale.

A spokeswoman for Spain's bank restructuring fund said the state would logically look at selling down its stake at some point. The fact that the share price was close to the level at which the state recapitalised the lender in May 2013 had triggered rumours, but no calendar had been agreed, she said.

(Reporting by Sarah White, Andres Gonzalez, Carlos Ruano, Jesus Aguado and Julien Toyer; writing by Julien Toyer; editing by David Stamp)