Bankia chairman wants privatization of bank to be phased in from 2014-2015

Goirigolzarri acknowledges it was a mistake to list the bank in light of its massive losses

The chairman of nationalized bank Bankia, José Luis Goirigolzarri, on Tuesday said he favored the gradual re-privatization of the lender beginning around 2014 or 2015 as a means of returning the funds injected by the state to save it from going under.

“There is no definitive plan, but I would like a privatization in parts beginning in 2014-2015, first with institutional investors and later retail investors,” Goirigolzarri told a meeting with reporters organized by Europa Press.

Outside the hotel where the meeting was held, Goirigolzarri was greeted by a group of angry holders of Bankia preferred shares, who have suffered heavy losses in their investments, as have equity holders. Goirigolzarri later told reporters reports that he understood “perfectly” that many preferred shareholders are “disappointed.”

Goirigolzarri acknowledged it was a mistake to list the bank in 2011 in light of its subsequent earnings. Bankia suffered a loss of 4.952 billion euros in the same year as it listed, followed by a record loss of 19.056 billion last year, the largest in Spanish corporate history.

Bankia listed at 3.75 euros. Its shares are now worth around 8 percent of its initial public offer price. In order to absorb the losses prior to the Orderly Bank Restructuring Fund (FROB) converting the bonds it has injected into Bankia parent BFA, the nominal value of Bankia’s shares is expected to be cut from 2.0 euros to 0.01 euros.

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