Bankia to reveal loss of more than €19bn

Bankia to reveal loss of more than €19bn

Bankia will next week reveal an annual net loss of more than €19bn, the largest in Spanish corporate history, as the nationalised lender that last year became the symbol of the country’s financial crisis speeds up its plan to close branches and sell assets.

The bank, which reports its full-year earnings on Thursday, will announce the loss as a result of a €12bn provision made in the fourth quarter of 2012 after it transferred assets into Spain’s “bad bank” vehicle Sareb at steep discounts.

Bankia, a merger of seven savings banks that was hailed at the time of its creation as the solution to Spain’s banking problems, last year succumbed to a state bailout eventually rising to €24bn just 11 months after it was listed on the Madrid stock market.

At the same time the bank has mandated Rothschild to sell its stakes in a range of companies, including 12 per cent of International Consolidated Airlines Group, the merged company of British Airways and Iberia, worth about £510m at Thursday’s close, and 5.3 per cent of the power utility Iberdrola, worth about €1.24bn. Bankia’s 15 per cent stake in the insurer Mapfre is worth about €1.1bn.

The Bankia bailout later forced Spain itself to request a European banking rescue last summer, and inflicted losses on hundreds of thousands of small savers who had been sold shares in the bank and savings products linked to its solvency. The bank declined to comment about its forthcoming results.