Spain's bailed-out Bankia posts £16bn losses
Thursday 28 February 2013
Spain's bailed-out Bankia has posted a full-year net loss of 19.2 billion euro (£16.4 billion), the biggest ever suffered by a Spanish company, after the lender cleaned up its balance sheets of bad property loans and other risky investments.
The bank transferred loans worth some £15 billion to the new Spanish "bad-bank", which was set up to take on the banking sector's toxic assets. BFA, Bankia's parent company, set aside 26.8 billion euro (£23 billion) in provisions. The group's overall net losses were 21.2 billion euro (£18.3 billion).
Spain's partners in the 17-strong group of European Union countries that use the euro granted Bankia an 18 billion euro (£15.5 billion) bailout last year to strengthen its shaky balance sheet.
The loan was part of a 100 billion euro (£87 billion) credit line earmarked for Spain's banks so that the cost of rescuing them would not sink the Spanish government's finances and force it to demand a sovereign bailout.
Bankia S.A. was formed in 2010 by merging seven savings banks. Back then it was one of Spain's top financial entities and heralded as the solution to the country's banking problems following the collapse of the once-booming property sector in 2008.
The 2012 results were more than six times bigger than the three billion euro (£2.6 billion) losses suffered in 2011.
The National Court is now investigating suspected mismanagement at Bankia by its former president -ex-ruling Popular Party minister and ex-IMF chief Rodrigo Rato - and 32 other one-time Bankia board members. Mr Rato has not been charged with any crime.
The bank, which is to shed some 6,000 staff, said today it hoped to return to profit in 2013.
The bank's shares, which have plummeted over the past few months, were flat at 0.3 euro in morning trading in Madrid.
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