Bankia

Post reply   Start new thread
:: New - Old :: Old - New

Pages: 1 |

Forum home :: Latest threads :: Search forums
The Comments
08 May 2012 02:32 by ojosazul88 Star rating. 171 posts Send private message

 
recent news article on Bankia.

Spain to spend billions on bank rescue

 


 

Mariano Rajoy, Spain’s prime minister, said in a radio interview that the government would consider injecting                                                                  state funds into the banking sector if needed.

“If it was necessary to reactivate credit, to save the Spanish financial system, I would not rule out injecting public funds, like all European countries have done,” Mr Rajoy said.

The bursting of Spain’s property bubble has seen the level of bad loans as a proportion of total lending rise to the highest level in 18 years, leaving banks managing vast portfolios of repossessed and unsold real estate, and choking off credit to an economy that is suffering its second recession in three years.

The government can deploy the state-backed Frob bank restructuring fund to pump capital into Bankia and is considering the use of contingent convertible bonds, known as cocos, an economy ministry source said.

The official would not say how much money would be needed. But Spanish press reports indicated that Bankia could receive €7bn-€10bn of additional capital. Bankia declined to comment.

Mr Rato, a former finance minister who was placed in charge of Bankia in spite of having little experience as a commercial banker, announced that he had proposed José Ignacio Goirigolzarri, former chief executive of rival BBVA, as his successor.

Mr Goirigolzarri was recommended after consultation with the Spanish government, one person close to Bankia said.

Last month, the IMF singled out Bankia as the largest risk to the stability of the Spanish banking sector, with the fund recommending that it and other banks take “swift and decisive measures to strengthen their balance sheets and improve management and governance practices”.

Part of the bank was listed on the Madrid stock market last year, raising €3.3bn from private savers and Spanish institutions – a move criticised by many analysts and investors for failing to recapitalise Bankia sufficiently.

Two of Bankia’s constituent cajas, Caja Madrid and the Valencian Bancaja, have historically had strong ties to the ruling centre right Popular party of Mr Rajoy.

Bankia shares, which slid 3 per cent on the news to €2.38, have fallen 36.5 per cent since their listing last summer.

Some bankers and analysts have argued that BFA, Bankia’s parent company which controls the listed entity and houses the combined group’s worst quality assets, needs significantly more capital.

BFA said last week it had renegotiated €9.9bn of assets last year to avoid them being classified as bad loans, equivalent to 5 per cent of the bank’s €188bn loan book.

One adviser to Spanish banks and government agencies said that if the amount Madrid injected into Bankia was not sufficient, and did not involve a much improved management of its bad assets, then the plan risked achieving little.

“Just injecting capital would be the equivalent of rearranging the deck chairs on the Titanic,” the person said. “I think Spain has not admitted to itself just how weak some of its banks actually are and how serious the situation is.”

 

 


This message was last edited by ojosazul88 on 08/05/2012.


This message was last edited by ojosazul88 on 08/05/2012.


This message was last edited by ojosazul88 on 08/05/2012.



Like 0      

Pages: 1 |

Post reply    Start new thread


Previous Threads

Man and a Van to Murcia - 4 posts
Sunday Opening Hours - Supermarkets - 5 posts
Calling a meeting / Employing workers - 0 posts
pet freindly places to stay - 1 posts
Costaluz, Maria L. de Castro did it again! - 7 posts
EU Citizens, Passports, and JSA - 6 posts
Hi im Louise - 4 posts
Mobile American Hoit Dog Cart....... - 1 posts
Anyone completed modelo 576 online? - 0 posts
Cucador Almeria - 3 posts
Non resident tax - 19 posts
Is there added salt in bottled water - 4 posts
Need a Family estate car - 2 posts
ITV Car test - 13 posts
HEATING SPANISH APARTMENT - 5 posts
jill - 8 posts
Maureen Hoskin - 0 posts
angina medication in spain - 0 posts
Tree Cutting Licence - 0 posts
BMI flight cancellations - 0 posts
BMI BABY - 0 posts
Gibraltar Border - 3 posts
QROPS Pensions - 14 posts
Legal tip 754. You need to buy again in Spain - 10 posts
Stay with the Company you have got - 1 posts

Number of posts in this thread: 1

DISCLAIMER:  All opinions posted on these message boards are the opinion solely of the poster and do not necessarily reflect the opinion of Eye on Spain, its servants or agents.


1 |
Our Weekly Email Digest
Name:  
Email:
   


This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x