A rise in rates could be the immediate prelude to the reprivatization of Bankia. This is what ABC has indicated to official sources that point out that, if the European Central Bank (ECB) ends up betting on raising the price of money, the profit margin of the financial sector will be re-launched and the entities' shares will improve their price.
For this reason, in the Fund for Orderly Bank Restructuring (FROB), follow closely the movements of the ECB, because at the price at which Bankia shares are currently listed, putting them up for sale would not be good business for the State. Hence, the Government opted to take more time to divest themselves of these actions in the market. And that's why the FROB still does not know, at this moment, when it will sell the shares it has in Bankia.
Until this sale is made, it will not be really known what the participation that the State has in the entity since it was done with it via the bank rescue. For the moment, as an estimate, in the balance of the FROB that state participation in Bankia appears with a valuation of 9.857 million euros.
Last December, the Government gave another two years for the reprivatization of Bankia, waiting for the stock market to be more favorable to make the operation profitable. As is currently the case of the stock market, the trend dragged by Bankia shares and the macroeconomic outlook – with a slowdown in growth after five consecutive years of GDP growth – the re-launching of the bank's share price seems to need the boost it would give to the banking business a rise in rates.
This higher cost of money would help to strengthen the income statements of financial institutions and, by extension, would favor the expected revaluation of the Bankia share, which went from being worth 4.62 euros at the beginning of May 2017, to trading below 2.6 euros in this last week.