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.

Learn about the markets and find spread betting tips at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.