Friday, May 25, 2012

Spain: Bankia Shares Suspended Before Aid Request

Shares in Spain's fourth largest bank have been suspended as the troubled lender reportedly prepares to ask the Spanish government for a 15bn euro (£12bn) bailout.

The part-nationalised bank's new management team is due to present a restructuring plan to ministers in Madrid to help it stay afloat.

It was previously expected to ask for 9bn euros (£7.2bn) in assistance but reports put the bailout figure at 15bn euros (£12bn), raising questions over whether or not Spain will need to seek international financial help.

Bankia, which holds 10% of Spaniards' deposits, is the weak spot in Spain's fragile banking system, bearing the brunt of loan losses stemming from the property crash in 2008.

The Spanish government said earlier in the week that it would provide any capital outlined in the new management's recapitalisation plan through a state-backed restructuring fund. Read More