MADRID: Bailed-out Spanish banking giant Bankia suffered a loss of ¤19bn ($25bn) in 2012, it said in an earnings statement yesterday.
It said the losses were as expected after the Spanish government nationalised Bankia in May, turning it into a symbol of Spain’s banking collapse. In December it received ¤18bn in eurozone aid for restructuring, fuelling 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 ¤19.193bn, 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 ¤1.2bn in 2015 after completing its restructuring. Its earnings statement noted liquidity of ¤40bn, including ¤27bn 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 ¤26.8bn overall in 2012. It offloaded ¤22.3bn’ worth of property-linked assets to a “bad bank” set up to purge the bad loans of Spain’s banks. Of this figure, ¤19.5bn were from Bankia.
BFA-Bankia’s net losses overall were ¤21.24bn, the earnings statement said. After the Spanish government stepped in to rescue Bankia by nationalising 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 ¤100bn, of which Spanish banks have taken about ¤40bn. 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.
AFP
