Bankia slumps as new shares hit market

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Bankia slumps as new shares hit market

Bankia slumps as new shares hit market
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Shares of Bankia tumbled again on Tuesday.

The latest slump came as the nationalised lender – which is at the center of Spain’s banking crisis – put 11.5 billion new shares on the Madrid stock market.

That was part of a 15.5 billion euro recapitalisation of Bankia.

The sell-off came as hundreds of thousands of small investors – who complained they were tricked into investing in the bank – dumped shares to try to recover some of their money.

The stock is likely to remain under pressure as the bank, now Spain’s fourth-biggest in terms of market capitalisation, faces mounting challenges to implementing its restructuring plan.

Its troubles have caused widespread outrage in Spain. The shares having lost about 90 percent of their value since the start of the year.

Former Bankia executives are being investigated for fraud. The lender, formed from the merger of seven former regional savings banks, is awash with bad loans after the collapse of Spain’s property market.

Angry investors

Hundreds of thousands of small savers, often retired people with little or no knowledge of finance, lost their money by investing in the bank when it was floated or by buying complex debt products that it sold between 2007 and 2009.

It is calculated that some savers have now lost as much as 88 percent on their initial investment.

“They’re cheating us again, like they did before,” said Maricarmen Olivares, whose parents invested in preference shares and lost 600,000 euros life savings made from selling her father’s car workshop.

She said she had not sold her new shares and had started a lawsuit instead of going for an arbitration process to get her money back.

“Everything is a swindle – the share listing, the compensation package, the value of the stock now. We don’t understand what they are trying to do with us. I’ve left it in the lawyer’s hands and I don’t even want to know about Bankia,” she added.

Between 200 and 300 people who lost money after investing in the bank’s complex debt instruments staged protests outside the Spanish parliament building on Tuesday morning.