Crisis will prevent savings banks from financing social projects
Financial problems will take their toll on cultural centers such as Madrid's Casa Encendida
The financial problems that are facing Banco Financiero y de Ahorros (BFA) - Bankia's parent company - as well as the nationalization of the bank will have a knock-on effect on the future of the social services and charitable organizations that are sponsored by the seven savings banks that make up the group.
According to the CMNV market watchdog, as a separate entity BFA posted 439.3 million euros of losses last year. But when listed as a group with Bankia, it declared minimal earnings of 41 million euros. Nevertheless, the losses suffered by BFA will prevent it from passing out any more money to the seven savings banks for their non-profit work, sources say.
Setting up charitable organizations is one of the biggest and most important factors of the Spanish savings bank sector. But the ongoing economic crisis, monetary losses suffered by some financial institutions and the nationalization of others has crippled this type of work.
For example, the future financing of cultural center La Casa Encendida, one of the principal symbols of Caja Madrid in the sector, is now up in the air because of the BFA-Bankia shakeup. How it is going to continue to finance public projects is still unclear, organization sources say.
Caja Madrid is the leader of the seven-member group that merged with Bancaja to form Bankia in June 2010.
