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Spain makes small profit on first Bankia stake sale

Source: Reuters - Fri 28th Feb 2014
Spain makes small profit on first Bankia stake sale

Spain is making a 301 Mln profit on the sale of a 7.5% stake in Bankia, the lender's parent company BFA said, as the government started to return the country's biggest bailed-out bank to private ownership.

The shares were sold at 1.51 each on Friday, a discount of around 4% to their closing price on Thursday but 12% higher than the 1.35 the government bought them at last year.

Bankia said the demand for the shares topped 2.5 Bln, almost twice the amount on offer, with international institutional investors showing the biggest interest.

While the sale is a powerful argument for the government as it struggles to convince angry Spaniards that the cleanup of the banking system has been a success, Spain is still a long way from recouping the more than 22 Bln it injected into Bankia, a merger of 7 failed regional savings banks.

Bankia became a symbol of Spain's financial crisis after the huge losses it and other banks suffered due to a property market collapse forced the government to take 41.3 Bln in European aid to rescue its weakest lenders.

Based on the Bankia's current market capitalisation, the remaining 60.9% stake of the state in the lender is worth around 11.1 Bln.

Bankia shares were down 3.8% at 1.52 at around 1000 GMT.

Senior government sources have told Reuters the state could sell its stake in several stages this year but would keep control of the bank until its Europe-agreed restructuring is fully completed.

The economy ministry closely followed the successful sale by the British government of a 6% stake in part-nationalised Lloyds last September.

Another Lloyds share offering is set to take place in March or April, with possibly a small number of shares being offered to retail investors.

Read the timeline of the Bankia Collapse to Rescue archive by clicking the link > HERE <

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