Bankia’s results were much better than market expectations, however, there are some uncertainties about its share price. The bank has achieved a profit of € 542 million, 23% less, with experts expecting a greater adjustment due to the bank’s efforts to get rid of unproductive assets.
All in all, the bank maintains a solid capital position which allows it to achieve its objective of consolidating a dividend yield of more than 6% with the payment of EUR 355 million to its shareholders, including the state (61%). In this regard, analysts are concerned about the privatization process that the new government wants to complete. The executive has almost two years to make a decision on the sale of Bankia after the extension, with a 2021 deadline, approved in 2018. This time will be used to analyse the operation in order to maximize profitability for the taxpayer and avoid decisions that might worsen the situation. This circumstance has fuelled speculation, encouraged by the government itself, about a possible merger with BBVA.
In this tug-of-war, Bankia’s shares have been among the worst performers in the Ibex35 selective index since the beginning of the year accumulating a loss of more than 10%. Its share price has fallen to €1.67, very close to its current main support of around €1.5 where it could start to experience a rebound, albeit a timid one. This is what JP Morgan expects after recently raising its target price for the share from €1.65 to €1.75.