May 26

The Rout In Spain (ZeroHedge, May 24, 2013):

From Mark Grant, author of Out Of The BoxThere Are Those Weeks

The Rout in Spain

Overnight the shares of Bankia plunged 51.4%. This, by any definition, is a rout. The citizens of Spain had bought preferred shares, hybrid bonds on the basis of an “implied guarantee” from the sovereign. No such luck. It had been a tout sold by the bank and guaranteed by no one. Now the owners are suffering the disastrous consequences.

Many European analysts had suggested that the swap out of these instruments into equity would drop the price of the stock to about 1.35 Euros but reality emerged today as the equity price plunged to 0.68 Euros. The shares traded today were forty-two times the normal average trading volume and indicated the size of the problem. The stock has lost 90% of its value since May 6.

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Feb 23

Europe is Safe… Just Ask Spanish Depositors… Who Have Lost EVERYTHING (ZeroHedge, Feb 22, 2013):

Anyone who wants to get an inside look at both the European banking system and the politicians in charge of fixing it need to only look at Spain’s Bankia.

Bankia was formed in December 2010 by merging seven totally bankrupt Spanish cajas (regional banks that were unregulated). The bank was heralded as a success story and an indication that European Governments could manage the risks in their banking systems.

Indeed, in 2011, Bankia even reported a profit of €41 million. And in April 2012, it was proposing paying a dividend. Then, in the span of two weeks, the bank revised its 2011 profit to a €3.3 billion LOSS, requested a formal bailout from Spain, and had to be nationalized.

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May 25

Bankia Bailout Costs Rise Again, Now At €19 Billion, €4 Billion Increase Overnight (ZeroHedge, May 25, 2012):

Well under 24 hours ago we wrote, “As Bankia Bailout Costs Grow Exponentially, Is A Stealth Bank Run Taking Place” in which among other things, we listed the chronology of the Bankia bailout. To wit: “Note the following sequence of events, bolded numbers, and dates: Continue reading »

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May 25

See also:

And So It Begins: Spanish Region Of Catalonia Demands A Bailout


–  Bankia Shares Suspended Ahead Of Rescue Details (Reuters, May 25, 2012):

Shares in Spain’s fourth-biggest lender Bankia SA were suspended on the Madrid stock exchange on Friday, ahead of an evening announcement when the bank is expected to ask the state for a rescue of more than 15 billion euros (12 billion pounds).

The government is in the process of nationalising Bankia, which holds some 10 percent of the country’s bank deposits, after it was unable to raise enough capital to cover heavy losses from loans to property developers during a building boom that crashed in 2007-2008.

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May 18

Spain hires Goldman Sachs to value Bankia: report (Reuters, May 18, 2012):

The Spanish government has hired Goldman Sachs to carry out an independent valuation of Bankia, the ailing bank taken over by the state last week, Spanish newspaper Expansion said on Friday.

The U.S. bank will review Bankia’s and its parent company BFA’s books and determine within a month how much the state should inject to refloat the lender, which had to be rescued after its auditor, Deloitte, identified several gaps in last year’s accounts.

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