Don't miss

Replay


LATEST SHOWS

EYE ON AFRICA

Mozambique: top constitutional lawyer killed in Maputo

Read more

MEDIAWATCH

Online reactions to Netanyahu’s speech to Congress

Read more

DEBATE

Netanyahu on Capitol Hill: Israeli PM calls for deal breaker with Iran (part two)

Read more

DEBATE

Netanyahu on Capitol Hill: Israeli PM calls for deal breaker with Iran

Read more

EYE ON AFRICA

Tangerine Dream. Afropolitan star Yemi Alade drops in

Read more

FOCUS

Denmark: How to stop the radicalisation of young people?

Read more

ENCORE!

'Deep Down Dark': Telling the story of the 33 trapped Chilean miners

Read more

THE INTERVIEW

Hong Kong's umbrella revolution 'is not dead'

Read more

MEDIAWATCH

Media reactions to Boris Nemtsov's murder

Read more

Europe

Bankia shares drop after record bailout plea

Text by News Wires

Latest update : 2012-05-28

Shares in Spanish lender Bankia dropped 28.66% on the Madrid stock market Monday, after the bank sought a record 19 billion euro bailout from the state - the largest in Spanish banking history.

AFP - Spain's troubled lender Bankia plummeted 28.66 percent on the Madrid stock market on Monday after the bank sought a record 19-billion-euro ($24-billion) state bailout.

Bankia shares dived 45 cents to 1.12 euros when trading was resumed after a suspension.

The bank has requested the biggest bailout in Spanish banking history from the state, which had already injected 4.5 billion euros this month.

Shares in the bank, formed in 2010 from a merger of seven troubled regional savings banks, have lost more than 70 percent of their value since listing in July 2011.

Spanish banks are at the heart of market fears that Spain, the eurozone's fourth-largest economy, could be forced to seek an international financial bailout.

Bankia has a vast exposure to the collapsed real estate sector, with central bank figures showing it held problematic property-related assets of more than 30 billion euros at the end of 2011.

Under the bailout, Bankia's parent group, the Banco Financiero de Ahorros (BFA), is seeking 19 billion euros in extra capital from the state-backed Fund for Orderly Bank Restructuring (FROB).

Bankia then plans to launch its own 12-billion-euro capital increase, to be underwritten by its parent group.

Economy Minister Luis de Guindos last week estimated that Bankia would need around seven billion euros but said his government would provide whatever funds were needed.

The state took a controlling 45-percent stake in Bankia this month by converting an existing 4.465-billion-euro loan to its parent group BFA into equity.

Bankia shares had been suspended from trading on Friday ahead of the board meeting.

Board members also agreed to revised the 2011 results to show a net loss of 2.979 billion euros caused by write-downs on its loan portfolio instead of a net profit of 309 million euros.

Prime Minister Mariano Rajoy's conservative government this month instructed Spain's banks to set aside an extra 30 billion euros in 2012 in case property-related loans go bad, on top of 53.8 billion euros required under reforms enacted in February.

Date created : 2012-05-28

  • SPAIN

    Spain's Bankia requests multibillion-euro bailout

    Read more

  • FINANCE

    Spain's stock market halts trading of Bankia shares

    Read more

COMMENT(S)