Anonymous Weekend Economists August 31-September 3, 2012

[Demeter]

34. Spain's Bankia to receive immediate aid after huge loss

http://www.reuters.com/article/2012/08/31/us-bankia-results-idUSBRE87U0W320120831?feedType=RSS&feedName=businessNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=56943

Spain's national bank rescue fund said on Friday it will inject emergency liquidity into troubled lender Bankia (BKIA.MC) immediately after the bank reported losses of over 4 billion euros ($5 billion) in the first half of 2012. Bankia, nationalised by the Spanish government in May, lost 4.448 billion euros in the six months to end-June after provisioning 2.7 billion euros in the second quarter against bad debt and assets.

Spain's Fund for Orderly Bank Restructuring (FROB) said it would inject capital into Bankia immediately as an advance on European aid negotiated by Spain for its ailing banking sector in June. It did not specify how much capital would be given to Bankia. "I am very satisfied with what the European and Spanish authorities have said because it means there is big support for our project," said Bankia Chairman Jose Ignacio Goirigolzarri. WHICH PROJECT IS THAT? BANKRUPTING THE NATION?

A financial sector analyst in Madrid said Bankia's poor results were expected and that a capital injection from the FROB had also been seen as a possibility. "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...The government also on Friday created a so-called bad bank to take over tens of billions of euros in defaulted loans and unsaleable property and to accelerate the clean-up of the banking sector...