Banco Financiera y de Ahorros (BFA), the parent company of Bankia, was technically bankrupt last year, with negative net worth of 4.489 billion euros, according to the bank's restated financial results.
BFA and Bankia have requested a total bailout from the government of 23.4 billion euros to clean up their balance sheets, which have been drained by the need to provision for toxic assets. Of the total, 4.465 billion euros has already been disbursed by the Orderly Bank Restructuring Fund (FROB) in the form of preference shares, which are being converted into common shares that in principle should be enough to cover the hole in BFA's accounts. This in turn could mean the government fully owns BFA.
BFA's restated 2011 results also show the group made a loss of 4.952 billion euros, the largest ever in Spanish banking history, ahead of the around 3.5 billion euros posted by Banesto in 1993. The loss attributable to BFA alone, which controls 52.4 percent of Bankia, amounts to 3.318 billion euros, with the difference attributable to Bankia minority shareholders' share of the loss. BFA has initially reported a net attributable consolidated loss of 30.25 million euros.
On an individual basis the BFA booked a massive 7.2-billion-euro loss last year and detailed its exposure to the ailing real estate sector at over 40 billion euros, twice the amount of any other lender in Spain.
BFA said the results were restated to reflect "unexpected circumstances and information available after the end of the year."
Of BFA's loss, 1.561 billion euros is attributable to Bankia. Another 1.565 billion came for the writedown of the value of tax assets, while there were financial costs of 358 million euros deriving from interest payments to the FROB on the preference shares to which it subscribed.
Bankia's shares continued to hemorrhage on Tuesday shedding a further 16.15 percent to 1.139 euros. The bank has now lost 69.6 percent of its market value since it listed on the stock exchange in July of last year at 3.75 euros per share. Some brokerages have put a target price on Bankia as low as 0.30 euros.