RSS Feeds

Shares plunge for Spanish bailed-out bank Bankia

Thursday - 12/27/2012, 2:01pm  ET

MADRID (AP) -- Shares in Bankia, the bailed-out Spanish bank, lost almost a fifth of their value Thursday after officials with the nation's bank bailout fund said the nationalized institution was worth minus EUR4.2 billion ($5.6 billion).

Bankia SA's share price ended the day 19.5 percent lower at EUR0.55 after Spain's Fund for Orderly Bank Restructuring revealed Wednesday night the extent of the bank's negative value-- essentially, more debts than assets. The figure suggests that the lender's losses on its toxic property investments from the Spanish building spree that imploded in 2008 are even worse than expected.

Bankia is being bailed out by the state for EUR18 billion ($24 billion) from a rescue fund set up by the 17 European Union nations that use the euro. The money will used to revitalize the bank's balance sheet.

Bankia was formed in 2010 in a merger of seven unlisted Spanish savings banks. A large number of the bank's shareholders are individual savers and pensioners who were sold stock in the lender and its precedents rather than being offered a savings account.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.