The Government will approve tomorrow in Council of Ministers to extend two more years, until the end of 2021, the period for the State to privatize Bankia, According to Efe, citing government sources. The Executive maintains the objective of completing the privatization of the old box with the priority of obtaining the maximum return of public aid.
The current situation of the markets has caused the Government to opt for an extension of two more years, as did the Executive chaired by Mariano Rajoy at the end of 2016, according to the same sources. The Minister of Economy, Nadia Calviño, already acknowledged on December 5 that the privatization of Bankia could not be done at the price it currently quotes and did not rule out postponing it beyond 2019.
In 2012, Spain decided to take forward a law in which it undertook to fully sell the shares subscribed by the FROB in the entities rescued within a term not exceeding five years from the date of subscription.
This commitment implied that the State should leave Bankia's shareholding in 2017; however, these were commitments agreed upon by Rajoy's own government and not with the rest of the EU partners, reflected only in a national law that could be modified or repealed by another norm of equal or later rank.
For this reason, at the end of 2016 the Government took forward a royal decree law that extended the period to privatize Bankia from five to seven years and laid the foundations so that with a mere agreement of the Council of Ministers an extension could be granted again.
The BFA-Bankia group received an injection of 22,424 million euros, of which 10,620 million went to Bankia – the listed subsidiary – before absorbing BMN, which had obtained 1,645 million in turn. Just a month ago, the Prime Minister, Pedro Sanchez, insisted that the priority of his Executive is to recover the money invested in the rescue of Bankia, something that, for now, is not possible due to the low stock price of the entity. So far in 2018, Bankia has fallen by 31.86% to 2.63 euros per share, bringing its capitalization to 8,131 million.
The Government's idea coincides with that of Bankia's own president, José Ignacio Goirigolzarri, who maintained that in a year like the current one, in which "bank shares are falling in Europe by 25%, it does not seem the most appropriate moment for the privatization of Bankia ".
The listed entity has returned 2,864 million of the aid: 1,304 million when the State sold a 7.5% stake; 818 million more with a second and final placement of an additional 7%; and the rest with the payment of dividends. Through this way, Bankia has reimbursed 128 million of its benefits in 2014; 195 million in 2015; 211 million in 2016 and 208 million in 2017.