Bankia – the symbol of Spain’s financial crisis – has announced some good news – its income from loans rose last quarter as it made a 362 million net profit for the first nine months of 2013.
That comes one year after its bailout plunged Spain into financial crisis and it will strengthen the Madrid government’s case that it does not need to extend a 41 billion-euro EU bank bailout deal which expires at the end of the year.
Bankia – and the country’s other financial institutions – are about to face stress tests with the European Central Bank checking their loan books to see if they could stand major shocks.
Spain’s Central Bank Governor Luis María Linde is very relaxed about that. He said: “We want an exercise that’s transparent, that is rigorous, that gives confidence to the markets. And we are not worried about the stress tests of our banking system.”
Also in Spain was the head of the Eurogroup of finance ministers, Jeroen Dijsselbloem, who met Prime Minister Mariano Rajoy and then said Spain’s recovery is on track but the banks are still at risk from a feeble economy. He added that they still need to be closely monitored as their profitability remains a concern.