The institution that runs Pablo Hernández de Cos has updated the balance of financial aid in the process of restructuring the Spanish banking system between 2009 and 2017. One of the most controversial consequences of the acute financial crisis, which erupted in 2008 and lasted for almost a decade. The first entity to fall was Caja Castilla-La Mancha. The socialist government of Zapatero had to come to his rescue in March 2009. Since then, about a dozen savings banks required public aid.
The most striking cases, for the amount of public funds disbursed, was that of Bankia, which in mid-2012 received an injection of 24,069 million euros (including the part of the subsequently absorbed BMN), which caused the Executive of Rajoy asked the financial rescue to Brussels. Not a year had passed since Bankia went public. The process for this case against the former executives of this entity will begin to judge next week at the National Court. It also highlights the resounding fall of Catalunya Banc, whose managers are also judged for raising salaries and pension plans in full rescue. The entity was recapitalized with 12,052 million euros of public money from the State. Finally, the Catalan entity was auctioned and it remained BBVA.
Rescue of Bankia and Catalunya Banc
The calculation of the Bank of Spain, dated December 31, 2017, reviews the rescue with public money received by 14 financial entities. Since 2009, more than 64,000 million were injected into the capital of these entities, through the FROB (the state-owned body created to clean up financial institutions) and the Deposit Guarantee Fund (a financial assistance tool nurtured with money of the bank itself).
Of the part of public money contributed directly by the State, through the FROB, and amounting to 54,353 million euros in total, the supervisor calculates that 4,477 million euros have been recovered. With the pending operations (among others, the full sale of Bankia's public participation), the supervisor estimates that another 9,857 million more could be recovered.
The banks injected another 9.745 million through their contributions to the bank of the bank, the Guarantee Fund. Of this amount, only 673 million have been recovered. But these amounts can not be considered public aid because they were disbursed by the banks themselves.
9.875 million in pending operations
"Since 2009, aid in the form of capital support has amounted to 54,353 million euros in public funds contributed by the FROB and 9,745 from the Deposit Guarantee Fund, a part of these resources has been recovered through refunds, sale or resolution of entities, up to a total of 5,150 million -of which, the FROB has recovered 4,477 million and the Guarantee Fund, 673 million-, "the banking supervisor said in a statement released Friday.
The Bank of Spain considers that the State could recover another 9.875 million euros with pending operations, such as, for example, the placement of the share it still has of Bankia. But the supervisor also adds as a cost the guarantees granted by the FROB in the processes of integration and sale of the boxes. Taking all this into account, the current cost of financial bailouts amounts to 42,621 million euros.
604 million more recovered aid
The Bank of Spain explains in the press release that in order to determine the cost, the losses that have been borne by the former shareholders, nor those of the holders of preferred and subordinated debt are not included. Neither does it incorporate the interest obtained, nor the legal or management expenses.
With the update announced this Friday, the capital that the Bank of Spain considers recoverable is reduced to 9,857 million. In the balance sheet at the end of 2017, the supervisor indicated that in this chapter of aid that can still be recovered there were 10,402 million. The difference is due to the sum of the perspectives of expected value by Bankia (9.26 billion) after its merger with BMN (538 million).
Recovered aid has increased by 604 million in the last year, to 4,477 million, for the aid returned by CEISS (the former Caja España-Caja Duero). Initially, the Bank of Spain sent a statement that estimated the loss of 42,621 million because it had left without subtracting those 604 million. Subsequently, he sent a rectification with the correct calculation, which leaves the loss figure at 42,017 million.