Spain’s bailed-out Bankia plans shareholder pay out next year

March 22, 2014 - 6:58:56 am
Bankia’s Chief Executive Jose Ignacio Goirigolzarri (left) and the Directors Board Secretary Miguel Crespo at the annual shareholder meeting in Valencia, yesterday.

VALENCIA: Spain’s bailed-out Bankia aims to pay a dividend next year, allowing the state to recoup more of the billions of euros taxpayers poured into the bank and helping to compensate thousands of small investors who lost money.

Once a symbol of Spain’s financial crisis, Bankia has evolved into a sign of the country’s economic recovery after it returned to profit in 2013 and the government began selling its majority stake, turning a small profit. 

But the bank still draws anger from small investors, who believe they were mis-sold complex savings products that became Bankia shares when the bank was rescued in the country’s biggest corporate bail-out.

About one hundred of them demanded compensation outside the bank’s annual shareholder meeting on Friday in Valencia, where it has its headquarters. They heckled Bankia’s Chairman Jose Ignacio Goirigolzarri as he told the meeting the bank aimed to  paying a dividend in 2015. 

This would be the earliest Bankia could make a payout to shareholders under the terms of its rescue. The dividend would be taken against 2014 profits, and submitted for shareholders’ approval at next year’s annual meeting.

“I can assure you that the board and the whole Bankia team is working with all the effort and commitment needed to make this dividend payout possible,” Goirigolzarri, who took over  when the bank was rescued in mid-2012, said. 

“It would be a way to reward our shareholders’ faithfulness, and it would also be an additional means of returning aid to Spanish taxpayers,” he said. 

Created via the merger of seven savings banks in 2010, Bankia was crippled by soured property investments and rescued less than a year after joining Madrid’s stock exchange. 

Now 60.1 percent government-owned, it took ¤22.5bn ($31bn) in state aid altogether and has never paid a dividend. 

The government sold a 7.5 percent stake last month, attracting big name investors such as billionaire financier George Soros. International funds now own more than 19 percent of the bank’s capital, up from under 4 percent last May.

When the bank was rescued about 285,000 people, including many pensioners, held Bankia preference shares and subordinated debt which had to be exchanged into shares at discounts after Bankia had to accept a ¤41.3bn rescue from Europe.    

Consumer group ADICAE, which represents many investors involved in that exchange, said dismissed Bankia’s talk of dividends next year and called for the bank’s management to focus on investigating and making up for past errors.

Reuters

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