The Spanish government opposes the hostile takeover bid filed Thursday by Spain's second-largest bank, BBVA, for its smaller competitor Sabadell, an Economy Ministry source has said.

The source said the government believes the merger would have possible detrimental effects on the Spanish financial system and would affect jobs and customers.

BBVA presented a 12.23 billion euro ($13.11 billion) takeover bid for Sabadell directly to shareholders on Thursday, even though Sabadell's board of directors already rejected a proposal on the same terms this week.

(Reporting by Emma Pinedo; edited by Inti Landauro; edited in Spanish by Javi West Larrañaga)