Shares in Bankia, the bailed-out Spanish bank, lost almost a fifth of their value Thursday after officials with the nation's bank bailout fund said the nationalized institution was worth minus (EURO)4.2 billion ($5.6 billion).
Bankia SA's share price ended the day 19.5 percent lower at (EURO)0.55 after Spain's Fund for Orderly Bank Restructuring revealed Wednesday night the extent of the bank's negative value_ essentially, more debts than assets. The figure suggests that the lender's losses on its toxic property investments from the Spanish building spree that imploded in 2008 are even worse than expected.
Bankia is being bailed out by the state for (EURO)18 billion ($24 billion) from a rescue fund set up by the 17 European Union nations that use the euro. The money will used to revitalize the bank's balance sheet.
Bankia was formed in 2010 in a merger of seven unlisted Spanish savings banks. A large number of the bank's shareholders are individual savers and pensioners who were sold stock in the lender and its precedents rather than being offered a savings account.