Bankia to be privatised when market improves - report (translated)
Story
Spain’s President Mariano Rajoy insisted on Wednesday that the state will privatise Bankia, but will wait until market conditions improve in order to recover the public aid given to the bank, Cinco Dias reported.
The Spanish president was speaking before lawmakers and responding to questions regarding the government's handling of the financial crisis.
As previously reported, the European Commission (EC) and the European Central Bank (ECB) have urged Spain to speed up the privatization of banks nationalized during the bailout of 2012 in cases where the state remains the controlling shareholder, with specific reference to Bankia. Brussels and Frankfurt warned that complications may arise if the Spanish government delays the sale in order to obtain a higher price.
According to the last data published by Bank of Spain, the state has only recovered EUR 2.666bn or 4.3% of the public aid given to the Spanish financial system, which since May 2009 totals EUR 61.495bn.
Rajoy said Spain had chosen not to let the banks fall as it was the more reasonable of two options. Spain requested up to EUR 100bn in loans from its European partners and has used EUR 39bn, the Spanish-language report said.
The state, through the Fund for Orderly Bank Restructuring (FROB), controls 62% of Bankia and 100% of its parent entity BFA. FROB initiated the privatization of Bankia in 2014 and sold 7.5% of Bankia held by its parent company BFA on 28 February 2014, since then, and despite increases in market valuations of Spanish banks, no further privatizations have been announced. According to the restructuring plans approved by the EC, the government has until December 2017 to dispose of those shares or otherwise, the bank should be liquidated.