Bankia: Nationalized in May 2012 is Now Known as a Symbol of Spain's Banking Collapse
Five years ago, when there existed a major crash in the property sector of Spain, the seven savings banks that were highly affected by it got merged together to construct one single incorporation, Bankia.
These seven component banks had given loans to several property developers and home buyers for construction and other real estate transactions and therefore they got severely damaged when the country's property experienced a major fall in the late 2000s.
Last year, Bankia along with its parent firm, BFA, asked for EU funds so that it could reconstruct its capital structure. As a help, for existence, the bank was given an aid of 18bn euros and it still made a loss of 19.2bn euros (Â£17bn, $25.2bn) for 2012. Provisions worth 26.8bn euros are not included into this.
As said by Spain's bank rescue fund, Bankia's parent firm could not be blamed for this loss as it still owes some worth but as far as Bankia is concerned, it had a major negative value.
In 2012, the Bankia-BFA group paid 21.2bn euros as tax. Bankia's shares were also suspended at the beginning of this year. As said by Bankia's chairman, Jose Ignacio Goirigolzarri, today at a news conference, "Despite the huge losses the bank's financial situation was in line with its aims. We have a very solvent balance sheet. We are a tremendously solvent and solid entity".