• Spain's news in English

Spaniards rail at Bankia as savings evaporate

AFP · 24 May 2013, 17:40

Published: 24 May 2013 17:40 GMT+02:00

Facebook Twitter Google+ reddit
The stock market regulator, the CNMV, said it would examine trading in Bankia shares on Thursday, when the value of the stock plunged 51.4 percent to just €0.68 ($0.88) in brisk trade.
By coincidence, the market rout came a day before chiefs of Spain's biggest banks came to testify as witnesses at the National Court in Madrid about Bankia's ill-fated listing in July 2011.
"Thieves", "bastards", cried a group of protesters who gathered outside the court as the bank chiefs arrived.

Bankia president Jose Ignacio Goirigolzarri told radio Cope he welcomed the regulator's inquiry into Thursday's trading, which he could not explain. "It is difficult to understand, I don't understand it," he said.

The Bankia boss said he suspected institutions had engaged in short-selling, in which traders bet that a stock price will fall. The Spanish daily El Mundo also reported several banks had engaged in short selling.

As the price collapsed, many small investors called their bank branches wanting to sell their Bankia shares, but were told they had to wait until Tuesday, Spanish media said. In theory individual investors could have sold their shares on Thursday, said Soledad Pellon, strategist at brokerage house IG Markets.

"But they don't know these practices. Institutional investors are much better informed about all the possibilities," Pellon said, adding that she believed the trade was legal.

Another brokerage house, Link Securities, said it believed the short-selling flouted Spanish regulations. "These sharp drop puts small shareholders in a weaker position because they can't sell and now face heavy losses," the group said.

On Tuesday, Bankia will boost its share capital by 15.54 billion euros, which had been expected to lead to an average loss of 36-38 percent for existing shareholders. Thursday's slump makes those losses much greater, however.

The investigation into the share trading comes as the courts investigate the original listing of Bankia nearly two years ago, with 33 bank officials suspected of fraud, embezzlement and providing false annual accounts.

As part of the probe, Santander president Emilio Botin, BBVA chief Francisco Gonzalez and CaixaBank boss Isidro Faine were called to testify to the court about meetings held in May 2012 with Economy Minister Luis de Guindos and then Bankia president Rodrigo Rato just ahead of his resignation.

Story continues below…

"Bankia was the bull in the china shop," said BBVA's Gonzalez, according to a legal source who was present during the testimony. "We did not tackle the problem in time."

Born in 2010 from the merger of seven troubled savings banks, Bankia soon became a symbol of Spain's banking crisis and the huge loans that turned sour after a 2008 property crash.

In May 2012, the BFA-Bankia group said it needed 19 billion euros to shore up its books, prompting Spain to seek a 100-billion-euro rescue loan for the entire industry from Brussels. So far, 41.3 billion euros of the rescue have been disbursed. 

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Russia withdraws request to refuel warships in Ceuta
The aircraft carrier Admiral Kuznetsov was due to dock in Ceuta

Russia has withdrawn a request for its aircraft carrier group to be refuelled at the Spanish port of Ceuta, authorities confirmed.

Bulls replace guard dogs at scrap yard in Valencia
Two bulls will be patrolling the scrap yard in eastern Spain. Archive photo: AFP

Guard dogs were not proving enough of a deterrent to thieves at a car breakers yard in eastern Spain so the owner has brought in a pair of fighting bulls.

Two-headed shark born in Spanish laboratory
Scientists are studying the rare find. Photo: IBIMA / University of Malaga

Scientists at the University of Malaga found the embryo of a shark with two heads and just one body.

Spain under pressure to stop refuel of Russian warships
Russian aircraft carrier Admiral Kuznetsov is due to arrive in Ceuta. Photo: Mil Ru / Wikimedia

Spain is facing international pressure to refuse permission for a Russian warship flotilla to refuel in Ceuta en route to continuing airstrikes against the Syrian city of Aleppo.

Most wanted: Fugitive rapist arrested in Tenerife
Mohammed Jahangir Alam was arrested n Tenerife. Photo: Crimestoppers.

Mohammed Jahangir Alam, one of Britain's most wanted fugitives, who fled the country in 2008 after allegedly raping a woman, was found working in Tenerife.

Spain's Rajoy says king has tasked him with forming govt
Photo: AFP

Spain's king on Tuesday tasked Mariano Rajoy with forming a government, taking the acting conservative prime minister a step closer to power again after a 10-month political deadlock.

Two imams arrested in Ibiza resort over 'Isis support'
The men were arrested in the resort of Sant Antoni de Portmany. Photo: Jose A / Flickr

Two Moroccan imams at a mosque on the Spanish resort island of Ibiza were arrested Tuesday on suspicion of backing the Islamic State group and inciting jihad.

Balearic Islands choose to keep summertime forever
The islands will have longer evenings during winter. Photo: AFP

The Balearic Islands want to keep summertime when the rest of Spain turns the clocks back on Sunday.

  Brazilian had 'uncontrollable desire to kill': Spain police
Francois Patrick Nogueira Gouveia has been charged with murdering his uncle, his wife and their two children. Photo: Guardia Civil.

A Brazilian teenager accused of dismembering his uncle and aunt and killing their two young sons in a grisly crime that shocked Spain had an "uncontrollable desire to kill", police said on Monday.

Man rescued from bin after climbing in to find old clothes
Photo: Policía Local Murcia

Police were called after passersby reported hearing a man calling for help from within a rubbish bin in the Vistabella neighbourhood of Murcia, southern Spain.

Analysis & Opinion
Out of the dark: Five years on from Eta ceasefire
Sponsored Article
Last chance to vote absentee in the US elections
Spanish 'La Mafia' restaurants banned after Italian complaint
Spain's top court overturns bullfighting ban in Catalonia
Hunt launched for ten most wanted Brit fugitives hiding out in Spain
Napflix: Spaniards launch very boring TV channel for siestas
Madrid parish church faces fine over 'too noisy' bells
Celebrate expat life at Madrid’s THRIVE convention
Fury after kids told to bring their own loo roll to school
Disney announces plans for Don Quixote action movie
Activist tells 8-yr-old matador wannabe with cancer 'just die'
King to make last minute push to avoid third vote in Spain
Amazing photos of Catalonia's 'human tower' contest
What's on in Spain: October 2016
'No way, Jose! You'll never get your hands on our Rock'
Recipe: How to make a classic Spanish tortilla de patatas
Chorizo in paella? Go back to cooking school Jamie Oliver
Spain in eye of a perfect storm after 10 months without govt
Thousands share clips of life for 'Spain in a Day' film
Ten incredible Spain locations for Game of Thrones season 7
Analysis & Opinion
Why moving to Spain could be the best decision of your life
Seven reasons why autumn is the very best season in Spain
Spanish study finds four types of personality. Which are you?
New search underway for civil war grave of poet Lorca
jobs available