• Court of Accounts.The Bank of Spain earned 62 million in interest and commissions with the bailout to the financial sector

The Banking Ordinance Restructuring Fund (Frob) has failed to recover a single euro from Bankia seven years after rescuing the financial institution, according to the report just approved by the Court of Auditors.

According to the document, the Frob has not been able to pocket even the money raised from the sale of shares and dividends, because this amount, exceeding 3,000 million euros, has had to remain in BFA, which is the entity that controls the 100% and through which 60% participates in the capital of Bankia. Instead of giving back to the Frob, BFA has fully dedicated the money it collects from Bankia to compensate those harmed by the purchase of preferred , subordinated obligations or shares of the financial entity at the IPO. The Frob still does not throw in the towel to recover money with a future privatization of Bankia and new dividends, but the auditors consider the balance so far void.

According to the status report of the bank rescue process sent to the Congress of Deputies, the Court of Auditors concludes that the team of José Ignacio Goirigolzarri in charge of Bankia has generated resources these years, but they have not even covered the cost of the litigation with those harmed by the management of previous stages of Rodrigo Rato and Miguel Blesa.

According to its calculations, Frob sold 7.5% of Bankia in 2014 for 1,304 million and another 7% in 2017 for 818 million. «In addition, during the period 2015 to 2019 Bankia distributed dividends charged to the benefits of the years 2014 to 2018, of which BFA [100% invested by the Frob] received, as a shareholder, a total of 962 million euros ». All this amounts to 3,085 million, 13.7% of the 22,424 injected. But Frob president Jaime Ponce has not even seen that money.

“The Frob has decided that the funds obtained by BFA from dividends and the divestment in Bankia, 3,085 million euros in total, are not currently entered into the Frob, remaining in the hands of BFA. In this regard, it must be taken into account that the aforementioned 3,085 million euros received by BFA have been used, mainly, to meet the costs arising from the legal contingencies described, ”says the Court of Auditors in its usual convoluted language. He subsequently clarifies that BFA has had to allocate not only all that money, but 600 million more, to compensate the victims of hiding the true quality of Bankia's preference and shares.

According to the Court of Auditors, those affected by the errors in Bankia's hybrid products and the IPO have already received BFA 3,693 million. The Frob held Bankia valued in the last fiscal year of 2018 at 9,560 million. With this amount subtracted from the 2012 bailout, it turns out that the estimated cost so far for the public coffers of the BFA / Bankia restructuring process, according to the Court of Auditors, is 12,864 million . This figure does not include the fortune dedicated to compensate the injured, but according to the Court, "these expenses do not directly compute" in the cost of the rescue. Nor does the Court of Auditors report that the current market value of the State's participation in Bankia is limited to 3,300 million. The shares closed last Thursday at 1.77 euros per share compared to 2.70 at the beginning of the year.

The Court of Auditors also shows distrust of the agreement signed in 2014 between BFA and Bankia whereby the first entity, 100% state, was responsible for the bulk of the cost of litigation, while the second, 60% owned by the State, with the least part. Therefore, it recommends the Frob to monitor the invoices that Bankia passes to those affected.

«This Court recommends that the Frob establish a BFA management system that facilitates the verification of the conditions established in the agreements signed between BFA and Bankia for the distribution of costs for legal contingencies arising from the commercialization of hybrids and the offer public subscription of Bankia shares ».

The Frob admits that the detailed monitoring of these invoices is being carried out "entirely by Bankia personnel", but it is not important. He claims in his allegations that he carries out a continuous monthly study of the information related to the costs incurred, analysis of the forecasts on his evolution or meetings of a specific monitoring body. Ponce has seen it so far enough to verify that each entity assumes its share of these costs.

For the Court of Auditors, "the Frob lacks detailed information on each of the payments made to Bankia by BFA derived from these legal contingencies (dates, individual amounts, concepts), having prepared only documents with aggregated information." He also criticizes that the state entity "has not carried out documentary checks of individual files to verify compliance with the limits and conditions established in the cost sharing agreements between BFA and Bankia."

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  • Congress of Deputies
  • Miguel Blesa
  • Rodrigo Rato
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