Fernando Rodríguez |Bankia’s stock market gains after the news that it will takeover BMN exceeded market consesus. But the future of Bankia’s stock price in the short-term will depend on the small print and the ratios of the merger.
The deadlines for the merger of Bankia and BMN will be accelerated once it has been confirmed there is no interest on the part of other investors. The tie-up is expected to be completed after the summer and will be the starting gun for the next round of sector consolidation.
It’s undeniable that the latest information which has come out about the Bankia case reveals new areas of responsability. And in the front-line is the worst governor in the Bank of Spain’s history. The correspondence which the head of the Bankia inspectors’ team José Antonio Casaus sent to his superiors is definitive.
The banks’ non-performing loans ratio continues to show signs of recovery amid the ongoing deleveraging process on the part of households and companies. The balance of impaired loans fell by 18.3% in May to 121,865 billion euros. Against this backdrop, Banco Sabadell and Bankia were the first banks to present their first half results’ report. And the Spanish stock market reacted in a completely different way to each report.
Fernando Fernández is a member of the board at Bankia and Red Eléctrica. Apart from the challenges presented by the macroeconomic environment and the technology revolution, he believes that Spain’s banks have to establish a new kind of relationship with their clients and consolidate the sector’s new size.
Deutsche Bank is still betting on the Spanish property market and has bought €400 million in doubtful property developer loans from Bankia. The deal was carried out by the German bank’s funds, which could have paid around 150 million euros for the assets.
Bankia, the lender which had to be bailed-out in 2012 with more than 22 billion euros of taxpayers’ money, is in the news because of the money it has now returned to its minority shareholders. Not for being the Spanish bank which recorded the biggest profits last year.
Bankia’s current management team has decided to give back to minority shareholders the money they invested in the banks’s shares in July 2011 with 1% annual interest. The proposal is a sensible one because it benefits shareholders and tax payers, as well as Bankia’s image and balance sheet.
Bankia, created from the merger of seven savings banks lead by Cajamadrid and Bancaja, and its July 2011 stock market listing, have become a major headache for many people: the bank’s shareholders, the current management team, the auditor, the Bank of Spain and the stock exchange regulatory body CNMV.
Renta 4 | Spain’s big banks H2 results expected to be weaker.