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Record loss for Spain's Bankia amid recovery signs

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Record loss for Spain's Bankia amid recovery signs
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Bankia has reported Spain’s biggest ever corporate loss – 19.2 billion euros.

That came as the rescued lender announced huge writedowns – 24 billion euros – after abandoning hope of ever being able to sell the property assets it lent money on.

However, there were some tentative signs of recovery with deposits rising, non-performing loans falling and costs being cut.

The bank – which needed a state bailout in the middle of last year – also stuck to its forecast of a return to profit this year.

“It will be a complex year, a year of challenges,” Chief Executive Jose Ignacio Goirigolzarri told a news conference, as he predicted 2013 would be “the year of the restructuring”.

“Our challenge now is to make Bankia a profitable entity that can return to society the support it has given us,” Goirigolzarri added.

Bankia has been the focal point of Spain’s banking crisis which forced the country to ask Europe for just over 40 billion euros in public money to help clean up its troubled financial sector, hit by the country’s property market crash.