Thursday 21 September 2017

SPAIN

A demonstrator holds up a sign reading
A demonstrator holds up a sign reading "Bankia took my scholarship" in the Puerta del Sol square during a protest marking the one year anniversary of Spain's Indignados movement in Madrid. Photo: Reuters

TROUBLED Spanish bank Bankia has delayed publishing first quarter results, stoking fears over the scale of losses at the newly nationalised lender and sending shares down 10pc.

Bankia was taken under state control last week because it cannot handle losses from a 2008 property crash. Some investors believe Spain or the European Union will have to inject funds into the financial sector to avert a collapse of the banking system, worsening the eurozone debt crisis.

"The problem right now is that nobody really knows what Bankia is worth and how much money the state is finally going to pump into Bankia," a Madrid-based trader said. "The uncertainty is absolute."

Bankia's parent company, Banco Financiero y de Ahorros, has not yet presented its audited 2011 results while it waits for Deloitte to sign off on its accounts.

The delay in the audit, coupled with a negative International Monetary Fund report on some of Spain's banks and a Standard and Poor's credit rating agency downgrade on the sovereign debt, precipitated the government move last week.

Deloitte identified a €3.5bn shortfall in the valuation of BFA's stake in Bankia when revising the bank's 2011 results, sources have said. Deloitte has declined to comment on the matter.

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