Bailed out Spanish bank set to post record €19bn annual loss
Bankia will next week reveal an annual net loss of more than €19 billion, the largest in Spanish corporate history, as the nationalised lender that last year became the symbol of the country’s financial crisis speeds up its plan to close branches and sell assets.
The bank, which reports its full-year earnings on Thursday, will announce the loss as a result of a €12 billion provision made in the fourth quarter of 2012 after it transferred €22.3 billion of assets into Spain’s bad bank vehicle at steep discounts.
Bankia, a merger of seven savings banks that was hailed at the time of its creation as the solution to Spain’s banking problems, last year succumbed to a state bailout eventually rising to €24 billion just 11 months after its listing on the Madrid stock market.
At the same time the bank has mandated Rothschild to sell its stakes in a range of companies including 12 per cent of IAG, the merged company of British Airways and Iberia, worth about £510 million at yesterday’s close, and 5.3 per cent of the power utility Iberdrola, worth about €1.24 billion. Bankia’s 15 per cent stake in the insurer Mapfre is worth about €1.1 billion.– (Copyright The Financial Times Limited 2013)