Spain's Bankia says to list assets of 275 bln euros

 

Banco Financiero y de Ahorros (BFA), a newly merged group of unlisted banks headed by Caja Madrid, said on Tuesday it would list on the stock exchange a banking and finance business with assets of 275 billion euros and a net book value of 12 billion euros.

Spain's debt-saddled unlisted savings banks, which lent heavily to homeowners and property companies during a decade-long housing boom, are under pressure from the government to shore up their capital or face nationalisation.

In a statement to the Spanish stock exchange regulator, BFA said its board had approved the plan to list its banking and finance business as a bank called Bankia. BFA would continue as an unlisted entity with enough funds to manage and meet commitments on separate, riskier assets, it said.

The unlisted assets would include subprime and bad property loans, some stakes in companies, and the necessary funds to meet the commitments on the assets, BFA said.

Earlier on Tuesday, Bank of Spain Governor Miguel Angel Fernandez Ordonez said the central bank was studying plans by 13 banks to boost their capital strength.

If the savings banks cannot attract sufficient private investment or sell off enough assets to shore up their capital, they can apply state funding from the government's recapitalisation fund, FROB.

Many private investors are wary of buying into opaque, regional banks in which local politicians are seen to have a big say.