Spain’s Bankia seeks 19bn-euro bailout from government
Spain’s fourth-largest bank, Bankia, has asked the government for a bailout worth 19bns euros ($24bn; £15bn).
The bank said that the “recapitalisation measures strengthen the group’s solvency, liquidity and stability”.
Earlier on Friday, trading in Bankia shares was suspended on the Madrid stock exchange while its management put together a restructuring plan.
The bank was part-nationalised because of problems with bad property debt.
Rating agency Standard and Poor’s has also lowered the credit rating of Bankia and four other Spanish banks.
The Spanish government has pledged to inject at least 9bn euros into the lender but added that more would be available if needed.
Shares in Bankia’s parent company Banco Financiero y de Ahorros (BFA) were also suspended.
Bankia had to reassure its savers last week that their money was safe after a Spanish newspaper reported a run on the bank.
Bankia was created in 2010 from the merger of seven struggling regional savings banks. It holds 32bn euros in distressed property assets.
Its shares fell 7.4% on Thursday to close at 1.57 euros, which is 58% down from their listing price in July 2011.
There have been four attempts by Spanish governments to shore up the banking system since the global banking crisis of 2008.
As part of the latest plan, lenders are having to make 30bn euros of extra provisions to cover potential losses on property loans, which comes on top of 54bn euros they were ordered to set aside in February.