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Spain lender Bankia will receive government financial aid after posting a EUR4.45BN loss in the first half.
Stricken Spanish lender Bankia will receive government financial aid after it reported a 4.45 billion euro ($5.7 billion) loss for the first half of the year, the Associated Press reported.
The poor result was due to 6.57 billion euro in loan losses in the first half of the year, Dow Jones Newswires reported.
Bankia, which was nationalized in May after announcing it would need nearly 24 billion euros to stay afloat, reported a net profit of 205 million euros for the same period last year, the Agence France-Presse reported.
The ailing lender is carrying 32 billion euros in toxic property assets following the collapse of the Spanish property bubble.
Spain’s Fund for Orderly Bank Restructuring, or FROB, said it would make an advance loan to Bankia prior to Spain receiving up to 100 billion euros from other eurozone countries to bail out its financial sector.
FROB did not say how much it would inject into the bank, but Dow Jones quoted a person familiar with the situation as saying the fund was expected to provide between four billion euros and five billions euros.
A financial sector analyst in Madrid told Reuters that Bankia's terrible results had been expected.
"The results are very bad, the provisions have really ruined the results, but in operating terms they are more or less what we were expecting," said the analyst, who asked not to be named.
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