FINANCIAL TURMOIL

Bankia to ask for a further 19 billion euros in bailout funds

Total rescue package of 23.5 billion euros by far the biggest in Spain

S&P reduces Bankia, Banco Popular and Bankinter ratings to junk status

Bankia and its parent Banco Financiero y de Ahorros (BFA), which were nationalized earlier this month, will ask the state for a further 19 billion euros to clean up their balance sheet, sources close to the bank said on Friday.

The Bank of Spain’s Orderly Bank Restructuring Fund (FROB) is already converting 4.465 billion euros in preference shares given to BFA into common stock, which will give the government control of both BFA and Bankia. The total rescue package of 23.5 billion euros will be by far the biggest bailout in Spain. The government had earlier calculated that a clean-up of the banking system as a whole would not amount to more than 15 billion euros, half of which was earmarked for Bankia.

The figures have yet to be confirmed officially by Bankia whose board of directors started a meeting to discuss the state of the bank’s finances at 4.30pm. The National Securities Commission (CNMV) on Friday suspended trading in Bankia’s shares on the request of the bank ahead of the announcement on the capital requirements of Spain’s fourth-largest lender.

Bankia’s shares closed Thursday down 7.43 percent at 1.57 euros, a 58-percent discount to the bank’s listing price last year of 3.75 euros.

The banks have been ordered to increase their provisions by up to 84 billion euros for potential losses against real estate assets.

BFA-Bankia needs to make provisions for loans to real estate developers of 7.1 billion euros and needs a further capital cushion of 1.9 billion. BFA is also expected to have to write down the book value of its 45-percent stake in Bankia, which currently stands at 12 billion euros against a market value of under 1.5 billion, which is expected to see it restate its 2011 results to show a loss.

If we go for the public bank option, we must have maximum transparency and parliamentary control”

The government is considering folding all of the lenders that have been taken over by the Bank of Spain to form a large public bank. The government has also taken over the reins at Caixa Catalunya, Novagalicia and Banco de Valencia.

Ahead of a meeting with Prime Minister Mariano Rajoy, the leader of the main opposition Socialist Party, Alfredo Rubalcaba, said this was an option worth considering.

“We should study this. If we go for this option, a public bank, it should have the status of a public bank: maximum transparency and parliamentary control,” Rubalcaba said.

There was further bad news for Spain’s banks on Friday when Standard & Poor’s cut the credit ratings of Bankia, Banco Popular Español and Bankinter to junk status and also took ratings action on other Spanish lenders.

Para poder comentar debes estar registrado en Eskup y haber iniciado sesión

Darse de alta ¿Por qué darse de alta?

Otras noticias

Últimas noticias

Ver todo el día

El Sismògraf convertirá Olot en el nuevo epicentro de la danza catalana

El festival mudará a mercado uniendo profesionales, programadores y público

El puzzle de Guanyem toma forma

La CUP-TPM se desmarca de la alianza y presentará candidatura propia

España es el tercer país que más inversión pide al ‘Fondo Juncker’

Bruselas identifica 60 proyectos en suelo español, la mitad en redes de transporte

Vicky Peña: “Hay que pasar página, pero antes hay que leerla”

La actriz interpreta ‘El largo viaje del día hacia la noche’, sobre la felicidad y el fracaso

LATIN AMERICA

Mexicans say “enough is enough” at huge protest rally

Tens of thousands from all walks of life call for changes to prevent a repeat of Iguala missing students case

Venezuela’s Maduro creates major anti-corruption body

The president’s new organization will have the power to investigate and sanction corrupt individuals

Colombia and FARC negotiate hostage release to unblock stalled peace talks

Army general and four others due for imminent release, say guarantors

Mexico’s First Lady to sell her controversial luxury home

Former soap star Angélica Rivera defends President Peña Nieto’s “integrity” and denies any conflict of interest

Lo más visto en...

» Top 50

Webs de PRISA

cerrar ventana