The new chairman of the Bankia (BKIA) group, sunk by real estate losses that led it to be nationalized by the Spanish government, told shareholders he “profoundly” regretted their losses and pledged to turn round the business.
Bankia will seek to reduce its 60 billion euros ($75 billion) of non-yielding assets by more than half over three years and improve its cost-to-income ratio to 40 percent from almost 60 percent over the same period, Jose Ignacio Goirigolzarri said today in a speech to shareholders in Valencia, Spain. Police stood by as customers and employees protested outside and some shareholders inside the hall shouted “out, out” as he spoke.
“I am also conscious of the losses that you have had in your investments in Bankia in recent months and I profoundly regret them,” Goirigolzarri said. “Our objective is that at the end of the next three years, Bankia, the company of which you are owners, will achieve a return on equity that’s in line with the average of the best competitors of the Spanish financial system.”
The government took over Spain’s third-biggest banking group last month after the International Monetary Fund called for action to strengthen its balance sheet and management as losses linked to real estate mounted. The group’s publicly traded bank, Bankia SA, raised more than 3 billion euros with a sale of shares last July that left shareholders, including many of its own customers, with losses of more than 75 percent.
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