Bankia 'to request $18.8bn govt bailout'

25 May 2012

Embattled Spanish financier Bankia is set to request a multi-billion dollar government bailout today (25 May).

New management officials at the bank - which was recently part-nationalized but remains Spain's fourth-largest lender - are scheduled to present their plans to restructure the company to policymakers later today.

And a source close to the administration has told Reuters: "The help needed to clean up the bank will be more than €15bn ($18.8bn)."

Spain's economy minister Luis de Guindos told a congressional committee earlier this week that the state will need to pump a minimum of €9 billion into Bankia to cover the writedown on its losses in the nation's ill-fated real estate sector.

Meanwhile, the problems of the Spanish banking system were underlined by a report from the Institute of International Finance released in Tuesday (22 May), which revealed that financiers' bad debts could soar as high as €260 billion.

By Gary Cooper

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