Spain's Bankia Hit on Ejection from Main Index, Negative Equity Value
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European markets are under pressure Friday, led by Valencia, Spain-based Bankia, which disclosed Thursday night that it would be leaving Spain's main index.
According to the filing, Bankia will exit the IBEX 25 on January 2nd after regulators took "special measures" following its recapitalization.
On Wednesday, Bankia said write-offs on bad loans were worse than expected, putting the institution with a value of negative €4.2 billion. News comes ahead of the bank getting an €18 billion (about $23.9 billion) infusion from the European Union (EU), expected to be deposited on Friday.
Under terms setup by the European Union for the bailout of the bank, shareholders will be the first to take losses in order to firm-up the bank's balance sheet.
The bank was formed by the merger of seven different Spanish savings banks in 2010 and listed on the IBEX 25 last year at €3.75. It will issue a €10.7 billion capital raise through the issuance of convertible bonds in January, a necessary step for the institution to remain viable.
Shares of Bankia are down once again today, lower by about 25 percent to €0.41. Shares fell over 18 percent the previous session.
According to the filing, Bankia will exit the IBEX 25 on January 2nd after regulators took "special measures" following its recapitalization.
On Wednesday, Bankia said write-offs on bad loans were worse than expected, putting the institution with a value of negative €4.2 billion. News comes ahead of the bank getting an €18 billion (about $23.9 billion) infusion from the European Union (EU), expected to be deposited on Friday.
Under terms setup by the European Union for the bailout of the bank, shareholders will be the first to take losses in order to firm-up the bank's balance sheet.
The bank was formed by the merger of seven different Spanish savings banks in 2010 and listed on the IBEX 25 last year at €3.75. It will issue a €10.7 billion capital raise through the issuance of convertible bonds in January, a necessary step for the institution to remain viable.
Shares of Bankia are down once again today, lower by about 25 percent to €0.41. Shares fell over 18 percent the previous session.
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