Spain's Bailed-Out Bankia Posts 19 Billion Euro Loss
Bailed-out Spanish banking giant Bankia suffered a loss of 19 billion euros ($25 billion) in 2012, it said in an earnings statement Thursday.
It said the losses were as expected after the Spanish government nationalized Bankia in May, turning it into a symbol of Spain's banking collapse.
In December it received 18 billion euros in eurozone aid for restructuring, fueling popular anger among protestors who blame the banks for Spain's financial crisis.
Bankia's fate prompted a broader rescue for the sector that raised fears Spain would need a full sovereign bailout.
Its chairman Jose Ignacio Goirigolzarri said that despite the net losses of 19.193 billion euros, Bankia's financial situation was in line with its aims.
"We have a very solvent balance sheet. We are a tremendously solvent and solid entity," he told a news conference.
The current year would be "a difficult year, a year of challenges due to the complex economic climate," he added.
"The big aim is to make this company not only solid but profitable."
BFA-Bankia, the financial group that includes the troubled lender, said it aimed to turn a profit in 2013 and targeted net profit of 1.2 billion euros in 2015 after completing its restructuring.
Its earnings statement noted liquidity of 40 billion euros, including 27 billion for Bankia, enough to cover its needs until 2018.
The bank has announced it will close a third of its branches and cut 4,500 jobs as part of the restructuring required by European authorities.
A long recession in Spain brought on by the collapse of a building boom in 2008 left Bankia saddled with unpaid loans.
The recession has driven Spain's unemployment rate to 26 percent.
BFA-Bankia said it made provisions of 26.8 billion euros overall in 2012.
It offloaded 22.3 billion euros' worth of property-linked assets to a "bad bank" set up to purge the bad loans of Spain's banks. Of this figure, 19.5 billion were from Bankia.
BFA-Bankia's net losses overall were 21.24 billion euros, the earnings statement said.
After the Spanish government stepped in to rescue Bankia by nationalizing it, Spain had to seek a broader bailout for its whole banking sector from the eurozone.
Its eurozone partners offered a credit line of up to 100 billion euros, of which Spanish banks have taken about 40 billion.
The government resisted reaching out for a full sovereign bailout and Spain's borrowing costs have since eased back from the danger levels reached in mid-2012.
Goirigolzarri's predecessor as Bankia boss, Rodrigo Rato, appeared in court in December in a judicial probe of alleged fraud in the running of the bank.
A former head of the International Monetary Fund and a star of the Spanish right, Rato quit as Bankia chairman shortly before it was nationalized in May.
Bankia was formed in 2010 through a merger of several regional savings banks in the first wave of finance sector restructuring following the 2008 crash.
Customers of Bankia have staged a series of public protests against it in recent months, accusing it of robbing them of their savings.
They say they were misled into converting the savings they held with the regional funds into high-risk investments after the creation of Bankia.
Source: Agence France Presse
| Copyright © 2012 Naharnet.com. All Rights Reserved. | https://naharnet.com/stories/en/73733 |