Bailed out Bankia returns to profit

BAILED OUT Bankia has returned to profit, and its share price has more than doubled from its low last year, sparking rumours it could be privatised sooner than expected.

The bank’s executive chairman said the lender has emerged from its trials as a formidable franchise, and that it is ready to shake off state ownership, while the government is said to be considering a partial float of its 68% stake this year.

It is an impressive turn around for the bank, which just 12 months ago announced a €19.2bn annual loss, the biggest ever recorded by a Spanish company.

Dubbed the bank that broke Spain, Bankia and the managers who presided over its demise became magnets for public anger across the country.

The bank was bailed out in May 2012, and the ensuing restructure saw it shed thousands of staff, and close a third of its branches, in a Brussels-approved plan to shrink the business.

It received €47bn in cheap ECB loans. Last year, Bankia repaid €19bn and it plans to pay down another €10bn this year.

But the chairman insists that “we have no ambition to become the first bank that pays back everything. These are loans with an interest rate of 0.25 per cent so I don’t see why you want to pay those back”