Spain’s Bankia group asked the government for a 19 billion euro bailout on Friday. The lender was nationalised earlier this month. Madrid now owns a 45 per cent stake.
Bankia is struggling to plug a hole in its balance sheet because it holds some 32 billion euros of bad loans or toxic assets linked to the country’s real estate sector.
Rating agency Standard and Poors cut its credit rating to junk on Friday, citing Spain’s weakening economy.
Trading in the group’s shares were suspended on Friday as executives discussed how much aid the lender needs.
Bankia stock has halved in value since its market debut last July. The bank posted losses of three billion euros in 2011.
Spanish Prime Minister Mariano Rajoy and Socialist opposition leader Alfredo Perez Rubalcaba met late Friday to discuss how to deal with the country’s weak banks.
But the cost of rescuing them could overwhelm government finances. Spain’s public purse is already strained by plunging tax revenues caused by a deep recession and an unemployment rate of nearly 25 percent.
Copyright © 2014 euronewsMore about:
- 1Divers grapple with inhuman conditions as Sewol ferry salvage continues
- 2MH370: bad weather halts search as ‘unidentified material’ found on Australian coast
- 3War of words grows more heated as Russia accuses the US of ‘running the show’ in Ukraine
- 4Exhumations at suspected Serbia mass grave begin
- 5Transnistria territorially tempting to Russia
- 1TV newscaster keeps calm as quake hits Mexico
- 2South Korea: Dramatic amateur footage emerges of final moments before stricken ferry capsizes
- 3Scientists find new Earth-sized planet that could host life
- 4Divers grapple with inhuman conditions as Sewol ferry salvage continues
- 5Dragon docks at International Space Station
Wires > News
- 12:44 CET U.S. official says Hamas-PLO government would prompt aid…
- 12:17 CET Three Americans killed in Kabul hospital attack
- 12:14 CET China says it will maintain patrols near Japan’s new island base
- 12:11 CET Former U.S. test site sues nuclear nations for disarmament failure
- 11:45 CET Libya faces enormous security challenge – U.S. diplomat
- 11:16 CET Obama reaffirms commitment to Japan on tour of Asia allies
- 10:56 CET U.N. Security Council members considering South Sudan sanctions
- 09:25 CET Wage talks resume as South Africa platinum strike marks 13th week