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Spain crisis: Bankia says it won't need more government aid

Bankia president Jose Ignacio Goirigolzarri said the bank was confident a government injection of 19 billion euros ($23.8 billion) would be sufficient.

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Spanish bank Bankia's headquarters in Madrid. (PIERRE-PHILIPPE MARCOU/AFP/Getty Images)

Stricken Spanish lender Bankia said today it was confident a government injection of 19 billion euros ($23.8 billion) – the country’s biggest ever bank bailout -- would be sufficient to turn the bank into a “solvent, efficient and profitable” financial entity.

Jose Ignacio Goirigolzarri, president of Spain’s fourth-largest bank, told reporters in Madrid that the troubled lender would not require further state funds, according to the Associated Press.

“We understand this group will not need any additional provisions; no additional money,” Goirigolzarri was quoted by euronews as saying.

“We think with this we can make a financially solid entity that, together with the number of clients we have, will allow us to be optimistic and trust in the development of a solvent, efficient and profitable entity.”

Goirigolzarri was confident that the bank would receive the additional funds in July, Sky News said.

Earlier this month Bankia received 4.5 billion euros in government funds, in a move that partially nationalized the bank and caused its share price to plunge.

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Goirigolzarri said today Bankia and its parent group BFA were prepared to sell real estate assets and “significant package” of companies as the lender seeks to restructure its business and repair its badly damaged balance sheet, the AP reported.

On Friday Bankia restated its 2011 results.The troubled lender made a 2.98 billion euro loss last year rather than the 309 million euros in profit it announced in February.

The announcement, made after the board of Bankia met in Madrid to approve the request for more public funding, came on the same day that ratings agency Standard & Poor’s reduced the bank to junk status.

Bankia was created in 2010 as a conglomerate of seven regional savings banks, which were struggling financially. It has 32 billion euros in toxic property assets following the collapse of the country's real estate bubble.

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http://www.globalpost.com/dispatch/news/regions/europe/spain/120526/spain-crisis-bankia-says-it-wont-need-more-government-aid