Stricken Bankia was urged to raise more cash
SHARES in bailed-out Spanish lender Bankia are expected to plunge today as new questions emerge about warnings it received in the run-up to its share issue last year.
The bank, rescued over the weekend with €23.5bn (£18.78bn) from the Spanish government, was told last year it needed more cash when it raised €3.1bn in July, City A.M. has learned.
Investment bankers who worked on the share issue said they argued without success for a larger infusion of new funds that might have given Bankia a greater change of surviving.
“All the international investors we spoke to said they thought the fund-raising deal was insufficient and the deal was structurally flawed,” said one banker.
“But whenever we put that to the company and its advisers our recommendation fell on deaf ears… All we got told is we needed to do more ‘investor mapping’.”
Bankia, Bank of America Merrill Lynch, Deutsche, JP Morgan and UBS were global co-ordinators on Bankia’s float, with Barclays, BNPP and Santander joint bookrunners. BBVA, La Caixa, Commerzbank, Mediobanca, Société Générale and UniCredit were co-lead managers while STJ Advisors and Lazard were Bankia’s advisers.
Most of the orders came from domestic institutions and retail clients, with international investors reluctant to put cash into Spanish financials.
Yesterday, Jose Ignacio Goirigolzarri, Bankia’s president, said the group would treat the state aid as an investment designed to make a profit for the Spanish government and not as a loan.
He issued a statement apparently to reassure markets after his comments the previous day, when he said “we don’t need to talk about giving any of it back”, shocked Spaniards.
The banks will also look to sell some of its industrial holdings, including IAG, the owner of British Airways, in which it has a 12 per cent stake.