Spain delays Bankia privatisation again
Spain on Friday again pushed back a target date for the sale of scandal-ridden Bankia, which the government took over during the financial crisis, saying it wanted to keep its timing flexible.
The finance ministry said it would now offload up its majority stake in the bank, Spain's fourth-biggest, to the private sector by December 2021 instead of the previous deadline of December 2019.
In 2011, the Spanish government spent 22 billion euros ($25.1 billion at current exchange rates) to save Bankia from collapse, a controversial rescue at a time when the Spanish economy was sinking into crisis and Bankia was seen as a symbol of financial excess.
Madrid even had to ask the European Union to help it pay for the rescue.
A law passed in 2012 stipulated that the bank, in which the government holds 61.4 percent, had to re-privatised within five years.
This 2017 deadline was subsequently extended by two years to end-2019 but market conditions have turned very difficult in recent months and the outlook is uncertain, giving the government pause for thought.
The ministry accordingly said Friday it wanted to "carry out its disinvestment strategy with greater flexibility to encounter favourable market conditions".
Even ahead of Friday's decision, Finance Minister Nadia Calvino said that Bankia's share price "does not reflect the bank's intrinsic value".
At the end of 2017, the government managed to recover 3.0 billion euros of its total outlay.
Bankia was formed in 2010 by the merger of seven savings banks which were themselves in difficulty after a real estate bubble burst in 2008.
Its former management team is currently on trial for falsifying Bankia's balance sheet and fraud ahead of the bank's failed stock market flotation in 2011 which was followed months later by the government bailout.
In its latest financial statement, Bankia in October reported a 1.8 percent increase in third-quarter profits to 229 million euros.
On Friday, Bankia shares were down 3.3 percent at 2.55 euros following the announcement.
This translated into a market value of under 8.0 billion euros for the entire bank.
© 2018 AFP