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Monday 25 September 2017

Spain's bailed-out Bankia makes €7bn loss

Charles Penty and Rebecca Christie

BANKIA group, the Spanish lender whose nationalisation pushed Spain toward a European bank bailout, has announced a €7bn loss as European officials said the country may get its first rescue funds soon.

Bankia said the nine-month loss compared with a pro-forma profit of €295m a year ago, as deposits fell 13pc from December and lending dropped 10pc.

It posted results as the European Union and European Central Bank said the bailout is "on track".

Spain, which asked for the €100bn bailout in June and has started implementing the conditions of the agreement, has yet to receive any cash from the European rescue fund.

It sought help a month after nationalising Bankia as the government's access to capital markets narrowed, and Prime Minister Mariano Rajoy comes under growing pressure to request a second international rescue.

"Overall, the findings of this mission point to a successful programme whose implementation is on track," the ECB and the European Commission, the EU's executive, said in a joint statement yesterday.

Recession

Earlier, Spain's National Statistics Institute said in Madrid that one-in-four Spaniards is now without a job.

Unemployment climbed to a fresh record in the third quarter as a deepening recession pushed the jobless rate to 25.02pc from 24.6pc in the previous quarter. That is the highest since at least 1976, the year after dictator Francisco Franco's death led Spain to democracy. The euro-area average is 11.4pc and Ireland's rate is 14.8pc.

"The situation is serious," said Ricardo Santos, an economist at BNP Paribas in London.

"There is still room for a deterioration in unemployment. Activity is weak and the government will reduce jobs as there are strict targets to adjust the number of public-sector temporary workers."

Irish Independent

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