Court case comes back to cloud Bankia recovery plan
By Julien Toyer
MADRID (Reuters) - A long-running court investigation into the flotation and bailout of Bankia (BKIA.MC: Quote), which could end with the Spanish bank having to pay 3 billion euros ($3.7 billion) to wiped-out shareholders, is coming back to cloud the lender's future.
Once a symbol of Spain's financial crisis, Bankia had evolved into a sign of the country's recovery after returning to profit in 2013. The state has begun selling its majority stake.
The bank had hoped to complete a restructuring agreed with the European Union in 2015, two years ahead of schedule, and resume dividend payments.
The move would have also paved the way for the state to further reduce its stake and recoup more of the 22.5 billion euros it injected when the bank collapsed in 2012, less than a year after going public.
But a report released on Thursday, commissioned by the Spanish high court and prepared by two Bank of Spain experts, has cast a shadow over the plan.
The document showed the bank presented a series of error-strewn accounts for the year it listed its shares, fuelling the hopes of investors including hundreds of thousands of private punters that they could eventually get their money back.
Shares in Bankia, which raised about 3 billion euros in the listing, were down 1.7 percent at 1.3 euros by 1322 GMT, having lost 6 percent on Thursday.
A source close to Bankia said the bank would have to deal with uncertainty over if and when it would have to pay back money to shareholders, but its strategic plan would not be derailed by the matter. Continued...