Bankia’s depositors have “nothing to fear”
Bankia’s depositors have withdrawn about €1bn from the Spanish bank since May 9, leading to a decrease of more than 60% in the value of the bank’s shares since May 4.
According to a report from Spanish newspaper El Mundo, based on data presented during a Bankia board meeting, depositors have already withdrawn about €1bn, leading to a market capitalisation loss of over €2.4bn.
In a statement issued today in response to the report, the bank said depositors have nothing to fear. “Depositors can be absolutely relaxed about the security of their savings that they’ve entrusted to Bankia,” said José Ignacio Goirigolzarri, who was appointed chairman of the bank on May 9.
On May 15, Bankia published preliminary first-quarter financial data rather than a full earnings report, leaving open the possibility to amend the figures to take account of a pending full audit of the 2011 accounts.
Last week, the Spanish government confirmed its decision to bail-out Bankia, one of the largest Spanish banks by assets.
Spain’s bank bailout fund has converted €4.5bn of preferred shares in Bankia’s parent Banco Financiero y de Ahorros into voting shares. Following the deal, the government holds a 45% controlling stake in the bank.
Following the bail-out, the Spanish government has also increased provisions to be held by domestic banks against real estate loans by about €30bn, and it has confirmed it will provide funds for those that need support.
“After three failed attempts to address the problems of the ailing bank sector, the government has introduced new and more far reaching measures on May 11 that it hopes will restore confidence to the banks and financial markets,” says Ted Scott, director of global strategy at F&C.
He adds: “These new measures represent a step in the right direction towards solving the banking crisis in Spain. However, the country does not require a step, it needs a giant leap. The reaction in the market, with bank prices on the Spanish stock markets falling sharply, reflected the general view that this was, once again, too little and too late.”