Bankia (BKIA) group’s new management will have an initial deadline of the end of the month to present a restructuring plan including additional state support after Spain nationalized the lender, a person familiar with the matter said.
Bankia’s parent, BFA, was nationalized on May 9, giving the state control of Bankia with a 45 percent stake. The lender must carry out a full independent audit before deciding what additional funds it needs, said a second person familiar with the plans, who also declined to be identified because the plan isn’t yet public.
Bankia group is the nation’s third-largest lender with more real estate on its books than any other Spanish bank and its nationalization adds momentum to Prime Minister Mariano Rajoy’s efforts to overhaul the industry. The Cabinet today is set to approve a second package of measures aimed at strengthening banks and allowing them to offload real estate into separate vehicles, Rajoy said on May 7, when he acknowledged for the first time he may use public funds to save banks.
Spokesmen at the Economy Ministry and Bank of Spain declined to comment when contacted by Bloomberg News.
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