Home » World News » Spain’s Bankia seeks 19bn-euro bailout from government

Spain’s Bankia seeks 19bn-euro bailout from government

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 540 other followers

Tweet!

Error: Twitter did not respond. Please wait a few minutes and refresh this page.

Spain’s fourth-largest bank, Bankia, has asked the government for a bailout worth 19bns euros ($24bn; £15bn).

Bankia also restated its results – now saying it made a 2.98bn-euro loss for 2011 rather than the 309m euros in profit it announced in February.

Earlier on Friday, trading in Bankia shares was suspended on the Madrid stock exchange while its management put together a restructuring plan.

Bankia has already been bailed out because of its bad property loans.

After a meeting of the board on Friday, Bankia’s parent Banco Financiero y de Ahorro (BFA) asked Spain’s bank bailout fund, FROB, to inject the 19bn euros.

Bankia will then issue 12bn euros in capital that will be underwritten by BFA.

The bank said that the “recapitalisation measures strengthen the group’s solvency, liquidity and stability”.

Rating agency Standard and Poor’s has also lowered the credit rating of Bankia and four other Spanish banks.

Partly-nationalised
Two weeks ago, Bankia had a 4.47bn-euro loan by the Spanish bailout fund converted into a 45% stake in the bank.

Bankia had to reassure its savers last week that their money was safe after a Spanish newspaper reported a run on the bank.

Bankia was created in 2010 from the merger of seven struggling regional savings banks. It holds 32bn euros in distressed property assets.

Its shares fell 7.4% on Thursday to close at 1.57 euros, which is 58% down from their listing price in July 2011.

There have been four attempts by Spanish governments to shore up the banking system since the global banking crisis of 2008.

As part of the latest plan, lenders are having to make 30bn euros of extra provisions to cover potential losses on property loans, which comes on top of 54bn euros they were ordered to set aside in February.

Regional trouble
The health of Spain’s banking system is key to whether the country eventually needs to seek a bailout itself from the eurozone and the International Monetary Fund.

Spain’s credit rating was downgraded by S&P last month on the basis that it would probably have to take on more debt to support its banks.

Also on Friday, there were appeals for help from another Spanish institution – its wealthiest autonomous region, Catalonia.

“We need to make payments at the end of the month,” said Catalan president Artur Mas. “Your economy can’t recover if you can’t pay your bills.”

Catalonia represents one-fifth of the Spanish economy.

It has to take out 13bn euros of loans this year to refinance maturing debt, not to mention funding whatever deficit it has for the current year.

The regions have been having trouble borrowing money commercially, so the central government has given them a special credit facility from the Official Credit Institute (ICO).

Those credit lines run out in June and the government has said it will come up with a new mechanism to provide credit for the regions, but it is unclear what form the help should take.

Advertisements

47 Comments

  1. […] Spain's Bankia seeks 19bn-euro bailout from government « Global … Global economy & finance journal. Finance analysis by Kacker … There have been four attempts by Spanish governments to shore up the banking system since the global banking crisis of 2008. As part of the latest plan, lenders are having to … https://kackerwords.wordpress.com/ — Fri, 25 May 2012 20:46:55 -0700 […]

  2. Hey there may possibly Make the most of a lot of the information through that write-up merely offer a website link here we are at your site?

  3. I appreciate your helpful post. topnotch work. I hope you release others. I will continue watching

  4. Jailbreak says:

    sup I’m Sarah I’m such a silly girl but I still particularly appreciated your writing

  5. I think other web site proprietors should take this website as an model, very clean and great user friendly style and design, as well as the content. You are an expert in this topic!

  6. I comparable this web blog vastly a great deal so a good deal wonderful information.

  7. Hi, i think that i saw you visited my blog so i got here to “go back the prefer”.I’m trying to to find issues to improve my website!I assume its good enough to use some of your concepts!!

  8. Hi, i think that i noticed you visited my weblog thus i got here to “return the want”.I’m trying to in finding things to enhance my site!I assume its adequate to make use of some of your concepts!!

  9. Cheers, I just stopped in to visit your blog and thought I’d say I enjoyed myself.

  10. Hey, I just stopped by to visit your website and thought I’d say I enjoyed myself.

  11. I consider something really interesting about your site so I bookmarked .

  12. Cheers, I just stopped in to visit your site and thought I’d say I had a great visit.

  13. Very interesting information!Perfect just what I was searching for!

  14. Absorbing info and well written. Keep up the good stuff!

  15. I found something similar elsewhere and really found it entertaining. Some more of this please! Thanks

  16. Hey there my name is Sally and I’m a researcher and this blog really aided me. I’m motivated! Thanks!

  17. I came here thinking something else, but this enlightened me regardless. Entertaining stuff!

  18. Hey there my name is Sally and I’m a student and this blog really helped me. I’m refocused! Thanks!

  19. Skates says:

    Great info and interestingly written. Keep up the good stuff!

  20. Hi there, just became aware of your blog through Google, and found that it’s truly informative. I’ll be grateful if you continue this in future. Many people will be benefited from your writing. Cheers!

  21. Not what I was searching for but nice anyway! Well done!

  22. I found something like this elsewhere and really found it helpful. Some more of this please! Thanks

  23. I didnt look for this, but I really like this, found it entertaining! Keep up the excellent work!

  24. Awesome info and well written. Keep up the fantastic stuff!

  25. Not what I was hunting for but superb anyway! Good for you!

  26. read more says:

    Excellent info and well written. Keep up the wonderful stuff!

  27. read more says:

    Hey dear from a girlreader keep up the great posts

  28. link says:

    Hey lovely from a femalereader contunue the great posts

  29. love this says:

    Not what I was thinking but great anyway! Good for you!

  30. Bonjour my name is June and I’m a student and this website really aided me. I’m inspired! Thanks very much!

  31. Elisha says:

    I like the way you put out things. It would be nice to read more posts from you. Bookmarked.

  32. Additional Aide With Quick Merchandise Of chapter 13 law firms the city of jacksonville educational facilities http://ukrainegay.org/index.php?p=blogs/viewstory/406270

  33. An Inside Look At Elements In pennsylvania truck accident attorney http://venusgaston1.multiply.com/journal/

  34. Great weblog right here! Also your website rather a lot up very fast!
    What host are you the usage of? Can I am getting your associate link in your host?
    I desire my website loaded up as fast as yours lol

  35. Hi there, I desire to subscribe for this weblog to obtain hottest
    updates, thus where can i do it please help out.

  36. L.E: the shipping confirmatio e-mail is at my spam folder, that’s why I in no way received it. It mentioned every thing I necessary to know, I just by no means found it.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: