Bankia shares slide on negative value appraisal

<p>Shares in Bankia have slipped after it was given a negative value in an assessment.</p>

Shares in Bankia have slipped by nearly 20 per cent since yesterday (December 27th) after Spain's bank rescue fund stated the lender has a negative value of -€4.2 billion (-£3.4 billion).

BFA – the institution's parent company, which is being bailed out – was deemed to be worth -€10.4 billion, with both these appraisals indicating losses on bad loans are worse than previously thought.

Bankia shares will be suspended from the benchmark Ibex index in Madrid from January 2nd until after its recapitalisation at the earliest, the stock exchange commented.

The bank is the largest in a string of Spanish banks to suffer massive losses on the loans it made to property developers and buyers during the country's housing bubble in the last ten years.

At 14:00 GMT, the Madrid Ibex slipped by 1.8 per cent to an index value of 8130.8 points and the benchmark looks to be ending 2012 marginally lower than last year, when it finished just short of 8500 points.

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