http://www.dw.de/dw/article/0,,15978514,00.html
Bankia says the planned government bailout will be enough to turn the bank around. If appproved, it would be the largest-ever bank bailout in Spain, at 19 billion euros ($24 billion).
Troubled Spanish lender Bankia is confident it will receive 19 billion euros in bailout funds from the government, bank president Jose Ignacio Goirigolzarri, told reporters on Saturday, adding that the money would probably arrive sometime in July.
He said after the recapitalization Bankia would be "solid, efficient and profitable."
Goirigolzarri blamed the massive loss on the economic crisis which has hurt Spain's property market, forcing it to collapse in 2008 after a decade-long boom. As a result, the value of Bankia's real estate assets dropped dramatically, leading to Bankia's need for state funds.
More money than expected
On Friday, the Spanish bank Bankia confirmed that it is seeking a further 19 billion euros in state aid as part of its restructuring plan. It comes in addition to the 4.5 billion euros that Madrid has already pumped into the lender and would make it the biggest ever bailout of a Spanish bank.
The sum requested is significantly larger than the 15 billion the bank had widely been expected to ask for.
Amid the speculation about just how deep the Spanish government would be asked to dig to bail out the country's fourth-largest bank, the Madrid stock market had suspended trading in Bankia's shares earlier in the day on Friday.
The price of its shares had plummeted by more than seven percent during Thursday's session. Bankia's shares have lost 58 percent of their value since they were listed in July 2011. The bank was created through the merger of seven struggling regional lenders in 2010.
Bankia received a further blow on Friday when ratings agency Standard & Poor's lowered its credit rating, along with those of five other Spanish lenders to junk level, from BB+ to BBB-.
"The rating actions follow our review of the wider implications for economic and industry risks in the Spanish banking sector after our two-notch downgrade of the Kingdom of Spain," the statement said, referring to its reduction of its rating of Spanish sovereign debt last month.
and perhaps that is optimistic........
http://economia.elpais.com/economia/2012/05/25/actualidad/1337956397_726943.html
The matrix Bankia public requests and inject 19,000 million 12,000 in its subsidiary
Full support will be about 23,500 million and 4.465 million counting the injected
The group's parent in turn approve an extension to its subsidiary 12,000 million
One of the directors of Bankia reach the headquarters of the entity for the meeting of the board. / MANUEL H. LEON (EFE)
The board of directors has approved the plan Bankia reorganization and recapitalization of the entity requesting the public support of 19,000 million, ashas already communicated officially to the National Securities Market Commission (CNMV). the analysis done by the new management team, led by Jose Ignacio Goirigolzarri, this implies a total requirement ofsanitation record in the Spanish financial history. For the whole group and Savings Bank Financial (BFA), and counting the amounts already injected, the figure is around 23,500 million euros, although the final figure has not yet been approved or issued by the entity.
The analysis of the deterioration of the assets of the entity and the provisions and capital requirements of the two financial reforms approved by the Popular Party government in just over three months have led the team Goirigolzarri to encrypt the new capital needs of public apply to about 19,000 million euros, according to market sources. To this figure must be added the 4.465 million in preferred stock and injected it and Savings Bank Financial (BFA) has requested the Government to become actions, which will mean the nationalization of the entity. The aid must be approved by the Ministry of Economy, the Bank of Spain and European authorities.
In turn, the matrix BFA approve a capital increase to inject 12,000 million in Bankia itself, as has also been reported to the CNMV Bankia. This participation of existing minority shareholders will be diluted unless you put them in your pocket about 6,600 million. If you do not put new money, and making calculations with current prices, their share will be reduced to about 10% of capital. If the actions of Bankia stock market collapse, and depending on the conditions of the capital, the dilution for small shareholders may be even greater.
The council has also decided Bankia reformulation of the accounts of 2011, with heavy loss of 2.979 million, rather than reported earnings initially, write-downs made in the portfolio of loans, foreclosed assets and in making value integrated market of investments in Bankia.
After reformulating the bills and support the need for public support,the board has resigned en bloc, with the sole exceptions of own Goirigolzarri and CEO, Francisco Verdú. The governing body passes from 18 to 10 members. They join the same Jose Sevilla, as executive director, and as independent Joaquin Ayuso, Eva Castillo, Jose Wahnon, Javier Campo, Jorge Cosmen, Fernando Fernandez and Jose Luis Feito.
BFA president and Bankia presented this Saturday at 10 am in the media and, subsequently, financial analysts, details of the reorganization and recapitalization plan. Goirigolzarri, states that "the recapitalization measures reinforce the solvency, liquidity and solidity of the Group and enable us to face a new stage of development of banking business and further the consolidation of a great franchise."
The agency explained that following the publication of Royal Decree-Law 2/2012 and 18/2012, surfaced provisioning requirements and capital amounting to 8.745 million euros have already been identified by the BFA Group. The group has made a deep and careful analysis of your portfolio inmobilliaria after which additional requirements have been identified amounting to 4,000 million euros. In total, the entity used to cover these loans and assets of 12.745 million euros brick. Thus, the total risk to the sector has Bankia and real estate developer will have a 48.9% coverage.
In addition, the Group has made a thorough review of the rest of the loan portfolio to suit a potential adverse economic scenario, which is an allocation of 5,500 million euros.
The sanitation activities started in the loan portfolio are BFA-Bankia Group to cover 12.6% of its total portfolio.
Funding for the rescue of Bankia exceed the sum of all the bailoutsconducted so far in the Spanish financial sector. In addition, the request for new aid overflows into a single entity the maximum forecast that the minister Luis de Guindos made just two weeks to the entire financial sector as a result of the second reform decree. Sources of Finance emphasized that the figures are not comparable because Guindos concerned the isolated effect of the second decree, while the sanitation Bankia includes items from the first and second order consolidation of real estate assets and also the review of the credit portfolio in whole and the outcrop of potential unrealized losses.
The figure is higher in the matrix, Finance and Savings Bank (BFA) in the subsidiary, Bankia. That is because one of the holes that had BFA was the very measure of subsidiary accounts. The matrix was valued their participation in subsidiary 12,000 million euros, when its value at market prices is less than 1,500 million.
The Economy Minister Luis de Guindos, announced Wednesday in Congress that the Government will fully support the capital needsresulting from new management plan and through the Bank Restructuring Fund (FROB) will be covered extensions capital may be necessary.
The mere conversion of preferred shares and 4.465 million to give the state a position of "clear control" BFA. After running the conversion, and already under the control of the FROB, the Government shall BFA recapitalize to meet all capital requirements and provisions required in the two recent financial reforms, maintain adequate capital in the future, to address all sanitation agreed by the management team and the Bank of Spain and eventually to cover all portfolio risk .. This recapitalization will be done through a capital increase fully subscribed by the State, through the FROB.
After the capital increase in BFA, the matrix itself proceed with the recapitalization of its subsidiary Bankia in an amount of 12,000 million.The capital increase in Bankia include preferential subscription rights for existing shareholders and will be insured in full by BFA, Bankia shareholder of a share of 45%.
http://politica.elpais.com/politica/2012/05/26/actualidad/1338037980_385459.html
The Socialist Party "did not endorse the provision of a euro Bankia public money without knowing what happened, whose fault is it and how it will solve," he has said in Oviedo the secretary general of the Socialist,Alfredo Perez Rubalcaba. The Socialist Party seeks to avoid, he said, that "socialize losses and privatize profits." To do his party will claim that the present managers of the entity but also the old ("A bank is not going to hell in three days or a year"), come to Parliament to account and explain what happened, and the Economy Minister Luis de Guindos, and Governor of the Bank of Spain, Miguel Angel Fernandez Ordonez, and all those who have had involvement in this banking crisis. Fernandez Ordonez and offered this week to go to the camera.
Perez Rubalcaba has expressed satisfaction with the agreements reached on Friday with the prime minister, Mariano Rajoy, and in particular the commitment by both parties in which Spain participates in Europe with a single voice and the same speech. "It's an important agreement to correct the poor image that Spain possesses on the outside at this time. It is that we see as one voice, sharing programs and interests, "he said.
Although the socialist leader does not hide the persistence of visions andeconomic analysis differentiatedbetween the PSOE and the PP ("They ask first adjustment and then growing and we say: first and second growth, austerity"), the new thinking that is making inroads in Europe, encouraged by the new socialist president of France, François Hollande, who puts the need of encouraging blind faith in cuts as the only anti-crisis policy, is, according to Perez Rubalcaba, an opportunity for two major political forces to work together for the benefit of Spain. "We will try to exploit and get the most we can for our country," Perez Rubalcaba sustained, especially now, he said, there is an opportunity because it is not the only one who holds PSOE ('How did since last August " ) that "adjustments are not only out of the crisis."
The secretary general of the PSOE has preferred not to comment on the political situation in Extremadura (where the PP came to the Government by the consent UI) after left-wing forces have achieved the Government of Andalusia and just this week to recover from Asturias, in this case, with additional support from UPyD. But, in a laconic, has argued, opening a hopeful expectation of change, that "things take their time."
Rajoy Rubalcaba and just talked on Friday Bankia (yes the situation in the financial sector as a whole), but, in the light of new state aid figures to be required (a total of 23.465 million to clean up the BFA group -Bankia, far superior to less than 15,000 million Guindos predicted from day 11 for the whole Spanish financial system), the Socialist leader raised the tone of your critical both for the deterioration of the body such as the management policy that has Indeed the government has channeled how a crisis of this scope in the country's fourth largest banking group, "If I said weeks ago that the management was disastrous, now I can not think of any way to make it worse," he said.
Rubalcaba has criticized the Government has been changing the figures of the cost of the rescue on the fly, move them from day to day, while increasing "uncertainty and Bankia shares continued to fall in the stock market", which also said, "has ido causing contagion to the rest of the Spanish financial system. " Claim for it, said, "are purged responsibilities".
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