Hubbry Logo
BankiaBankiaMain
Open search
Bankia
Community hub
Bankia
logo
8 pages, 0 posts
0 subscribers
Be the first to start a discussion here.
Be the first to start a discussion here.
Bankia
Bankia
Bankia
View on Wikipedia
from Wikipedia

Bankia (Spanish pronunciation: [ˈbaŋkja]) was a Spanish financial services company that was formed in December 2010, consolidating the operations of seven regional savings banks,[2] and was partially nationalized by the government of Spain in May 2012 due to the near-collapse of the institution.[3][4] As of 2017, Bankia was the fourth largest bank in Spain, with total assets of €179.1 billion.[5] In 2021, the bank merged with CaixaBank to create a new entity, initially preserving its original name.

Key Information

History

[edit]

Formation and IPO

[edit]

Bankia was formed on 3 December 2010, as a result of the union of seven Spanish savings banks that had a major presence in their historical core regions. The merger of the seven banks, known as 'cold fusion', took only four months, with the integration contract being signed on 30 July 2010.[6] Caja Madrid, which was itself owned by the government of the Community of Madrid, held controlling interest. The distribution of shares was as follows:

  • 52.06% Caja Madrid
  • 37.70% Bancaja
  • 2.45% La Caja de Canarias
  • 2.33% Caja de Ávila
  • 2.11% Caixa Laietana
  • 2.01% Caja Segovia
  • 1.34% Caja Rioja

After the merger, Bankia was initially owned by the holding company Banco Financiero y de Ahorros (BFA), and the seven banks controlled BFA. The most toxic assets from the banks were transferred to BFA, which obtained €4.5 billion from the Spanish government rescue fund FROB in exchange for preference shares with an annual interest rate of 7.75%, maturing in 2015. In 2011, Bankia offered shares to the public in an IPO.[7][8] Investment bankers found little interest in the IPO among international institutional investors. The strategy shifted to selling the stock domestically and largely to customers of the bank itself, with 98% of the initial €3.1 billion raised by domestic sales of shares.[9] The shares of Bankia began trading on the Bolsa de Madrid on 20 July 2011, under the symbol BKIA, and the bank was listed in the IBEX 35.

Insolvency and state bailout

[edit]

In 2012, Bankia was the third-largest lender in Spain but the largest holder of real estate assets at €38 billion.[8] On 7 May 2012, Rodrigo Rato stepped down as chairman of Bankia SA, in order to clear the way for a rescue plan that the Spanish government hoped would persuade international investors of the country's financial stability. José Ignacio Goirigolzarri became the new president. Concerns about the value of Bankia's assets, and the potential for further losses in the future, prompted speculation that the Spanish government would inject up to €10 billion of new capital into the troubled bank.[10]

On 10 May, the Spanish government said it would convert its preference shares in BFA into voting shares, giving it a controlling stake of 45% in Bankia.[8] On 25 May, trading in the shares was suspended at Bankia's request.[11]

On 25 May, it was reported that Bankia SA had negotiated a further state guarantee, marking another rise in the cost of a drawn-out rescue.[12] Bankia also revised its earnings statement for 2011, stating that instead of a profit of €309 million, it had in fact lost €4.3 billion before taxes, and asked for 1.4 billion fiscal credit to reduce its loss.[11][13] The New York Times described the increasing bailout as making Spain one of the new focal points of the European sovereign-debt crisis.[14] In response to growing concerns, Standard & Poor's downgraded its rating of Bankia's creditworthiness to BB+, making it a junk bond.[12]

In the end, the rescue plans approved by the European Commission on 27 June 2012 under state aid rules included an equity injection for €4465 million and a liquidity guarantee of €19 billion to BFA, 12 of which would be provided to Bankia.[15][16]

Restructuring (2012-2017)

[edit]

A number of limitations were imposed as a result of having received state aid. Shareholders had to share part of the burden of the capital injection, the balance sheet had to be reduced, dividends were restricted until 2014, and both the branch network (-39%) and workforce (-28%) had to be reduced.[17]

In addition to the financial problems, the new management had to deal with controversies related to former management.

In 2013, Bankia returned to profitability.[18] In 2013, Bankia Bolsa was acquired by the Catalan entity GVC (founded by the president of the Barcelona Stock Exchange, Joan Hortalà). Bankia, which received 37 million euros from the sale, did not report the capital gains. Subsequently, the entity changed its name to Beka Finance.[19]

On 28 February 2014, Spain sold a 7.5% stake in Bankia for €1.3 billion. The shares were sold at €1.51 each.[20] Further divestment was expected for 2014 under the rescue programme, but did not happen.[21]

On 7 July 2015, Bankia paid the first dividend in its history €0,0176 per share. On 16 October, Bankia completed the sale of City National Bank of Florida for $883 million to Chilean bank BCI.[22] The bank was bought by Caja Madrid for $1.12 billion in 2008.[23] At the end of 2015, Bankia had fulfilled two years ahead of schedule all the targets set by the European Commission in the BFA-Bankia Group Restructuring Plan. The bank also reported the best efficiency, solvency, and profitability among the six largest Spanish banks.[24]

On 23 February 2016, Fitch raised Bankia's rating to "BBB−", restoring the bank's rating to investment grade.[25] On 8 September, Bankia announced that it was included in the Dow Jones Sustainability Index with a score of 84 out of 100.[26]

On 27 June 2017, Bankia agreed to acquire state-owned bank BMN (Banco Mare Nostrum) for €825 million in an all-stock deal. BMN was the result of the merger of the savings banks Caja Murcia, Caja Granada and Sa Nostra.[5] On 3 November, Bankia announced that it was listed in the CDP Climate Change report for 2017 as one of a group of 112 global companies leading the fight against climate change.[27] The restructuring period will end on 31 December 2017.[28] The deadline for the privatisation of Bankia was end-2019;[29] however, in December 2018 the Government decided to postpone the privatization until end-2021.[30]

Since 2017

[edit]

On 27 February 2018, Bankia announced that it planned to pay €2.5 billion to shareholders over the next three years as part of its 2018-2020 strategic plan. It aimed for a profit of €1.3 billion in 2020.[31]

On 4 September 2020, it was confirmed that CaixaBank and Bankia were negotiating a potential merger. The merger would create the biggest domestic bank in Spain with assets of €650 billion.[32] The merger was effective 26 March 2021.[33]

Controversies

[edit]

IPO misleading

[edit]

On 27 January 2016, the Spanish Supreme Court ordered Bankia to reimburse two small investors for misleading them during its 2011 IPO. The court said that the prospectus for its public stock offering had contained "serious inaccuracies". The bank is aware of lawsuit claims totalling €819 million and has set aside €1.84 billion in provisions for claims.[34] On 17 February 2016, the bank announced it would fully compensate minority shareholders who participated in the IPO in exchange for returning their shares to the bank. They will receive 100% of their investment plus 1% compensatory interest per annum.[35] The offer saved Bankia €400 million in legal costs.[36]

Preference shares

[edit]

Bankia sold around €5 billion in complex financial products such as preference shares and subordinated debt to customers. Most of these products suffered enforced writedowns. The bank began an arbitration process in 2013.[37] On 15 July 2016, the time limit for submissions of applications for arbitration expired.[38]

Credit card misuse

[edit]

On 23 February 2017, 65 individuals received sentences for misusing the company's credit cards. Rodrigo Rato (former president of Bankia, and also a former managing director of the IMF) was sentenced to four and a half years in jail, and Miguel Blesa (former chairman of Caja Madrid) was sentenced to six years in jail.[39] The other defendants received sentences ranging from three months to six years.[40] Documents indicate that the personal spending by executives and directors totaled €12.5 million.[39] The fraud was discovered by the publication of an article on eldiario.es based on the emails of Miguel Blesa. Initially, the article did not lead to any judicial investigation. Instead, Madrid's chief prosecutor tried to initiate legal actions against the media that spread the emails of Blesa, because they were "illicitly obtained". The news led Bankia to order an internal investigation, and the bank later transferred the information to the FROB.[41][42]

Customer care

[edit]

In January 2022, Carlos San Juan de Laorden, a retired urologist from Valencia with Parkinson's disease started an online petition for more human customer care at bank branches. At a malfunctioning ATM a sign informed customers that they could only be seen with appointments, but no appointments could be made by phone.[43] He gathered more than 600,000 signatures in 2 months, asking banks and other institutions to serve all citizens, and not discriminate the oldest and most vulnerable members. In Spain, the number of bank branches had shrunk to about 20,000 in 10 years since the bailout of 2012, and with the coronavirus pandemic another 3,000 branches closed in less than 2 years with the push for online banking.[44]

Organisation

[edit]

The bank has its registered office and address of the subsidiaries in Valencia, while its operational headquarters are in Madrid. It also has a representation office in Shanghai. The bank is organised into six business areas: Retail Banking, Business Banking, Private Banking, Asset Management and Bancassurance, Capital Markets and Investees.[45]

Bankia was listed on the Bolsa de Madrid and was a constituent of the IBEX 35.[citation needed]

See also

[edit]

References

[edit]
[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia

Bankia

View on Grokipedia
from Grokipedia
Bankia S.A. was a major Spanish banking corporation headquartered in Madrid, established in 2010 through the integration of seven regional savings banks (cajas) including Caja Madrid and Bancaja, which had accumulated substantial losses from excessive real estate lending during Spain's property boom. As Spain's fourth-largest bank by assets, it initially pursued aggressive expansion but rapidly deteriorated amid the 2008 financial crisis, culminating in a €23.5 billion government bailout and nationalization in 2012—the largest such intervention in Spanish history—after revealing €4.3 billion in undisclosed losses for 2011. The bank's 2011 initial public offering (IPO), which raised €1.3 billion from retail investors, became emblematic of governance failures, as its prospectus contained flawed that overstated profitability and concealed provisioning shortfalls, leading to investor losses exceeding €2 billion when shares plummeted post-nationalization. Subsequent investigations highlighted supervisory lapses by the and executive misconduct, though key figures like former chairman were acquitted in 2020 fraud trials, underscoring tensions between legal outcomes and evident accounting irregularities that eroded in Spain's financial oversight. Under state control via the FROB entity, Bankia underwent restructuring, shedding assets and refocusing on core operations, yet remained burdened by legacy toxic loans tied to the cajas' politically influenced lending practices. By 2020, amid post-crisis consolidation, Bankia merged with in an all-share transaction valuing it at €4.3 billion, with the state retaining a minority stake in the enlarged entity, which became Spain's leading lender by ; the integration, finalized in , marked Bankia's dissolution as an independent group and reflected broader European efforts to fortify banking resilience through scale. This exemplified the perils of decentralized, regionally politicized banking models in absorbing economic shocks, contributing to Spain's sovereign debt strains and EU-wide financial assistance mechanisms.

History

Origins in the Cajas Network

Bankia's origins lie in the traditional Spanish network of cajas de ahorros (savings banks), regional mutual institutions designed to promote thrift among lower-income populations and support local economic initiatives. These entities, which first appeared in with the founding of the inaugural caja in , operated as non-profit organizations governed by assemblies comprising local authorities, depositors, and community representatives, channeling surpluses into social welfare, , and cultural projects rather than distributing dividends. By the late , the network encompassed over 40 independent cajas, controlling approximately 30-40% of total banking assets in and emphasizing retail deposits, mortgage lending, and financing. The core predecessors of Bankia were drawn from this network, particularly Caja Madrid and Bancaja, which together dominated the eventual merger. Caja Madrid, formally the Caja de Ahorros y Monte de Piedad de , traced its lineage to the Monte de Piedad established in 1702 to provide pawn-broking services to the needy, later incorporating savings operations in the amid broader European thrift movements. Bancaja, headquartered in , originated from the Caja de Ahorros de Valencia founded in 1878 by the Royal Economic Society of Friends of the Country, focusing on agricultural and industrial financing in the eastern region. These institutions exemplified the cajas' hybrid model, blending charitable foundations with commercial banking while maintaining strong ties to regional politics and economies. Complementing these were five smaller cajas integrated into the group: Caja de Ávila, Caixa Laietana (from Barcelona), Caja Segovia, Caja Insular de Canarias, and Caja Rioja. Each served niche provincial or insular markets, with histories rooted in 19th-century mutual aid societies—Caja Segovia, for instance, dating to 1855—and prioritizing community-oriented lending over aggressive expansion. This decentralized structure fostered resilience through localized risk management but also engendered fragmentation, duplicative operations, and vulnerability to sector-specific downturns, such as Spain's construction boom in the 2000s. The cajas network's emphasis on over pure profitability distinguished it from commercial banks, yet by politically appointed boards often prioritized regional , leading to inefficiencies and correlated exposures to . By 2010, amid the global and Spain's housing market collapse, these foundational traits underscored the need for consolidation among the seven entities, setting the stage for Bankia's creation as a unified commercial entity under the Banco Financiero y de Ahorros (BFA) holding structure.

Formation and Initial Structure (2010)

Bankia was established on 3 December 2010 through a merger of seven regional savings banks, initiated under Spain's Sistema Institucional de Protección (SIP) framework to consolidate fragmented institutions burdened by exposure to the collapsing sector. The primary participants included Caja Madrid, which contributed approximately 52% of the initial capital, and Bancaja with about 40%, alongside five smaller entities: Caja , Caja de Guadalajara, Caja Insular de Canarias, Caja Laietana, and Caja Rioja. This "" process, formalized by an integration contract signed on 30 July 2010, enabled the transfer of banking operations without immediate full operational integration, aiming to pool resources for recapitalization via state-backed mechanisms. The initial positioned Banco Financiero y de Ahorros, S.A. (BFA) as the apex , fully owning the newly formed Bankia, S.A., which served as the operational retail and commercial banking arm. BFA encapsulated the merged entities' non-core assets, including substantial holdings valued at over €30 billion at inception, while Bankia focused on core lending and deposit activities with an initial exceeding €300 billion in assets. Ownership of BFA resided with the foundations (obras sociales) derived from the original cajas, preserving their influence over strategic decisions through a model that allocated board seats proportionally to capital contributions. This tiered setup reflected regulatory mandates from the to enhance viability ratios and access hybrid capital instruments, though it masked underlying solvency risks from pre-merger loan portfolios heavily concentrated in construction and development financing. At formation, Bankia's leadership was drawn from predecessor institutions, with , former Caja Madrid president, appointed as chairman, overseeing an executive team tasked with integrating disparate regional operations into a national-scale entity. The structure facilitated initial stability but deferred comprehensive asset quality assessments, contributing to later revelations of provisioning shortfalls.

Public Listing and Early Performance (2011)

Bankia commenced its public listing on the Stock Exchange on July 20, 2011, marking the flotation of approximately 55% of its shares held by parent entity BFA, with the offering priced at 3.75 euros per share after a 15% reduction from the lower end of the initially proposed range of 4.41 to 5.05 euros. This adjustment was made amid investor caution over Spain's and the restructuring of the sector, aiming to ensure the institutional tranche was covered and attract retail participation. The IPO raised more than 3 billion euros, positioning Bankia as a key test of market appetite for consolidated entities emerging from the merger of seven regional cajas, including Caja . Trading debuted weakly, with shares opening at around 3.66 to 3.68 euros, reflecting an initial drop of 1.9% from the IPO price, and dipping as low as 3.51 euros—a 6.4% decline—before recovering somewhat to close flat or marginally lower. This lackluster reception contrasted with broader market gains, such as Santander's 5% rise that day, underscoring concerns over Bankia's exposure to Spain's troubled sector and the broader financial strains. In the weeks following the listing, shares briefly gained about 4%, buoyed by initial stabilization efforts and the discounted entry valuation. However, performance deteriorated through the remainder of 2011 amid escalating sovereign debt pressures, deteriorating economic indicators in , and skepticism toward the viability of post-merger savings banks, leading to sustained downward volatility and highlighting underlying risks in Bankia's asset quality that would later surface. The listing thus reflected tentative optimism for systemic reforms but quickly exposed persistent vulnerabilities in the Spanish banking landscape.

Revelation of Insolvency and Nationalization (2012)

On May 7, 2012, resigned as executive chairman of Bankia amid mounting pressure from the Spanish government over the bank's deteriorating financial position, which was exacerbated by its significant exposure to the collapsed sector following Spain's burst. Rato's departure, previously the managing director of the IMF from 2004 to 2007, signaled internal acknowledgment of severe problems, as Bankia had reported a Q1 2012 profit of €158 million just weeks earlier despite underlying asset impairments. The Spanish government responded swiftly by intervening on May 9–10, 2012, effectively nationalizing Bankia through the Fund for Guarantee of Bank Deposits (FGD), which injected €4.5 billion in recapitalization funds and assumed control by converting deferred loans into a 45% stake in the bank's parent , BFA. This action, authorized under Royal Decree-Law 24/2012 on credit institution restructuring, aimed to prevent systemic contagion in Spain's banking sector amid a broader sovereign debt crisis. Under new chairman José Ignacio Goirigolzarri, appointed post-intervention, Bankia restated its 2011 financial accounts on May 25, 2012, revealing a net loss of €4.3 billion—contrasting sharply with the previously reported €309 million profit—and prompting a further request of €19 billion to cover capital shortfalls from non-performing loans totaling over €47 billion. The restatement highlighted accounting irregularities and understated provisions for loan losses, primarily tied to developer defaults and repossessed properties amid Spain's double-dip . Bankia's insolvency stemmed fundamentally from its origins in the merger of regional savings banks with heavy lending during the pre-2008 boom, leaving it with impaired assets equivalent to 20–25% of its by 2012, as confirmed by stress tests. The government's , while stabilizing operations, shifted the burden to taxpayers and intensified market concerns, contributing to Spain's request for a €100 billion EU-wide banking sector on June 9, 2012.

Bailout and Immediate Restructuring Measures

In May 2012, amid escalating revelations of Bankia's stemming from heavy exposure to the Spanish real estate crash, the Spanish government initiated intervention under the framework of Royal Decree-Law 24/2012 on the and resolution of credit institutions. This law enabled the classification of Bankia as meeting resolution criteria due to its high , prompting burden-sharing measures including the write-down of equity and hybrid capital instruments held by shareholders and certain creditors. On May 25, 2012, Bankia's board formally requested a €19 billion capital injection from the state to cover restated 2011 losses exceeding €4 billion and anticipated provisioning needs. The bailout was channeled through the Fund for Orderly Bank Restructuring (FROB), which by June 25, 2012, acquired 100% ownership of Bankia's parent company BFA, effectively nationalizing the group and extinguishing existing BFA shareholders' stakes without compensation as part of the resolution process. Bankia shareholders faced near-total write-down, with their eroded to reflect the institution's true capital shortfall, while in BFA was partially converted to equity to absorb losses. Initial capital support included conversion of prior FROB-provided convertibles totaling €4.5 billion into equity in June 2012, followed by a direct €4.5 billion injection into BFA on September 4, 2012, marking the first phase of recapitalization funded partly by (ESM) loans to . The total recapitalization ultimately reached approximately €23 billion, with net costs estimated at €17.2 billion after accounting for asset transfers. Immediate restructuring commenced with the appointment of new management in May 2012, led by José Ignacio Goirigolzarri as president, tasked with overhauling operations and preparing a comprehensive viability plan. Trading in Bankia shares was suspended on May 25 to facilitate the bailout assessment and prevent market panic, while dividends were halted to preserve liquidity. The resolution mandated swift asset segregation, culminating in the transfer of €22.4 billion in non-performing real estate assets to the state-backed "bad bank" SAREB by December 31, 2012, to isolate toxic exposures from core banking activities. These steps aimed to stabilize the balance sheet, restore solvency ratios above regulatory thresholds (targeting CET1 above 10%), and lay groundwork for divestitures of non-strategic units, though full operational downsizing—such as branch closures and staff reductions—was outlined in the subsequent EU-approved plan.

Long-Term Restructuring and Profitability Return (2013-2017)

Following the and initial in 2012, Bankia implemented a comprehensive restructuring plan approved by the on November 28, 2012, which mandated a significant reduction in its size by more than 60% by 2017, alongside divestitures of non-core assets and capacity rationalization to restore viability. The plan emphasized transferring problematic real estate assets to the Sareb "," closing branches, reducing staff, and focusing on core activities to minimize state aid dependency and achieve sustainable profitability. These measures were executed under via the Fund for Orderly Bank Restructuring (FROB), which held a controlling stake, enabling aggressive cost-cutting amid Spain's post-crisis economic recovery. Key restructuring actions included shedding thousands of employees and closing over 1,000 branches between 2013 and 2017 to lower operational expenses and align capacity with a shrunken asset base. Bankia also accelerated asset disposals, reducing exposure to high-risk loans through sales and provisions, which contributed to declining ratios as the Spanish economy stabilized. By 2015, the bank had met all milestones ahead of schedule, including contraction and capital strengthening, allowing a shift toward . The restructuring yielded a return to profitability starting in , driven by lower loan loss provisions, cost efficiencies, and rising as pressures eased. Bankia's attributable net profit was €512 million in , marking a reversal from prior losses, with the broader BFA-Bankia group reporting €818 million. Profits grew to €747 million in 2014 despite provisions for IPO compensation claims, supported by a 22% year-over-year increase and improved revenue from core lending.
YearAttributable Net Profit (€ million)Key Factors
2013512Initial profit post-bailout; reduced provisions and asset cleanup.
201474722% growth; higher despite compensation costs.
20151,04040% rise; falling bad loans and asset sales gains.
201680423% decline due to low interest rates; offset by cost controls.
20178161.4% increase; end of restrictions, commercial momentum.
By 2017, Bankia concluded its five-year , lifting European-imposed constraints on expansion and dividends, with profitability sustained through disciplined and a leaner operational footprint. This phase demonstrated the efficacy of enforced in restoring financial health, though ongoing state involvement highlighted residual fiscal risks from the .

Preparations for Merger (2018-2020)

In February 2018, Bankia unveiled its strategic plan for 2018-2020, emphasizing capital returns to shareholders totaling €2.5 billion over the period through dividends and share buybacks, alongside a pivot away from lending toward growth in consumer finance and other segments. The plan targeted significant improvements in asset quality, aiming to reduce gross non-performing asset (NPA) ratios below 6% and net NPA ratios below 3% by enhancing and provisioning. These measures were designed to bolster Bankia's financial health and market position, facilitating potential as the Spanish government, via the Fund for the Orderly Restructuring of Banks (FROB), held a indirect stake through BFA Tenedora de Acciones. To support these objectives, Bankia executed key asset disposals, including an agreement in December 2018 to sell a portfolio of non-performing loans (NPLs) and foreclosed assets with a gross book value of €2.8 billion at a discount, which contributed to deleveraging and strengthened its balance sheet ahead of ownership transition discussions. In January 2019, FROB, BFA, and Bankia formalized an agreement on stake management, aligning operational strategies with the government's divestment goals while extending preparatory efforts for a competitive sale process. The Spanish extended the privatization deadline for Bankia from December 2019 to December 2021 in December 2018, providing additional time for optimization and market conditions to support a full exit of , either through or strategic transaction. This extension reflected ongoing from the 2012 , prioritizing profitability restoration—evidenced by a net attributable profit of €744 million in the first nine months of 2018—over rushed divestment amid European banking sector pressures. Throughout 2019 and into 2020, Bankia's implementation of the strategic plan continued to focus on cost efficiencies and , reducing operational expenses and enhancing retail customer services to improve valuation metrics in anticipation of alternatives, including potential consolidation with peers amid Spain's broader banking sector integration trends. These efforts positioned Bankia as a viable merger candidate, culminating in exploratory talks with by mid-2020, influenced by economic uncertainties from the that shifted emphasis from standalone sale to synergistic union for long-term stability.

Business Model and Operations

Core Banking Activities and Asset Portfolio

Bankia's core banking activities centered on retail and commercial banking services within , encompassing deposit-taking, , consumer and lending, and services such as and debit cards. The bank's primary customer base included individuals, small es with turnover up to €6 million, and larger corporates, with forming the largest segment and contributing the majority of operating income through net interest margins on deposits and loans. Deposits from individuals served as the main funding source, supporting a domestically oriented model that emphasized low-risk residential mortgages and SME financing over higher-risk commercial exposure post-restructuring. The asset portfolio was predominantly composed of loans and advances to customers, classified at amortized cost, which constituted the bulk of assets following the 2012 and asset segregation. By 2019, Bankia held a 12.5% national in mortgages, 10.9% in household loans, and 11% in household deposits, reflecting a conservative tilt toward secured residential lending after transferring non-performing assets valued at approximately €19 billion to Sareb in 2013 as part of the bailout-mandated cleanup. Total consolidated assets stood at €251.5 billion as of December 31, 2013, with the "steady" portfolio focused on retail and SME loans segregated from riskier developer exposures to enhance stability. Post-2012 restructuring emphasized portfolio and risk reduction, reducing foreclosed holdings to €1.65 billion gross by 2019 while prioritizing performing loans to households and SMEs, which aligned with regulatory demands for sustainable funding and lower ratios. This composition supported a return to profitability by 2014, driven by from the retail-focused assets rather than volatile or corporate lending segments.

Customer Services and Retail Focus

Bankia operated as a retail-oriented , primarily serving individual customers, small and medium-sized enterprises (SMEs), and select corporate clients through a nationwide network of approximately 2,000 branches. This extensive physical presence supported its core emphasis on accessible banking services, including deposit accounts, loans, mortgages, and payment solutions tailored to everyday consumer needs. The bank's strategy integrated traditional branch interactions with emerging digital channels to enhance and satisfaction. In March 2018, Bankia upgraded over 600 ATMs to NCR SelfServ models capable of deposits, aiming to streamline transactions and align with principles of , transparency, and customer proximity. Complementing this, Bankia introduced integration as a voice-based channel, enabling users to perform banking queries and operations via mobile devices, thereby boosting engagement and loyalty among tech-savvy retail clients. Under its 2018-2020 strategic plan, Bankia prioritized metrics such as net promoter scores to drive improvements in retail , while expanding multichannel offerings to include and mobile platforms for broader reach. Additionally, the bank pursued growth in democratized services for retail investors, implementing 's on-premises platform in to support personalized advisory and products. These initiatives reflected Bankia's adaptation to post-crisis demands for efficient, customer-centric retail operations amid Spain's competitive banking landscape.

Risk Management Practices Pre-Crisis

Prior to its formation in 2010, the savings banks (cajas) that merged to create Bankia, such as Caja Madrid and Bancaja, operated under governance structures heavily influenced by regional political authorities, which undermined effective risk oversight and fostered a culture of lenient credit standards. These entities prioritized rapid balance sheet expansion over prudent risk evaluation, with limited mechanisms for independent board scrutiny or market-driven accountability, resulting in inadequate internal controls for monitoring loan portfolios. Political interference often prioritized local economic stimulus through lending, sidelining rigorous due diligence and diversification strategies. A core deficiency lay in the aggressive expansion of lending, which grew by over 500% between 2000 and 2007 across Spanish savings banks, including Bankia's predecessors, without commensurate mitigation. assessments relied excessively on collateral values inflated by the boom, with minimal for market downturns or borrower creditworthiness beyond nominal appraisals. This led to high concentrations— loans comprising up to 19% of the group's by 2011—coupled with optimistic provisioning policies that delayed recognition of potential losses. models shifted toward volatile wholesale markets to support this growth, amplifying risks without robust contingency planning. Upon Bankia's establishment in July 2010 as the commercial arm of BFA (the holding entity from the caja merger), inherited frameworks persisted, with early capital injections from the Fund for Orderly Bank Restructuring (FROB) totaling €4.465 billion in December 2010 highlighting pre-existing strains but failing to enforce comprehensive overhauls. Internal models for inadequately accounted for sector-specific vulnerabilities, such as promoter financing tied to cycles, contributing to a buildup of impaired assets that reached 7% of the portfolio by 2011. Supervisory forbearance from the allowed these practices to continue, delaying mandatory provisioning until regulatory decrees in 2012 exposed the €13.2 billion baseline capital shortfall.

Governance and Leadership

Key Executives and Decision-Making

Rodrigo Rato served as president of Bankia from its formation in December 2010 until his resignation on May 7, 2012, having been appointed to lead the consolidation of seven regional savings banks, including Caja Madrid and Bancaja, into a single entity amid Spain's post-2008 financial pressures. Under Rato's leadership, the board, comprising representatives from the founding cajas with significant political ties, approved Bankia's on July 20, 2011, which raised €6.6 billion but relied on optimistic asset valuations that later proved unsustainable due to heavy exposure to Spain's collapsing sector. Francisco Verdú, appointed in May 2011 shortly before the IPO, oversaw operational execution of the listing but resigned in July 2012 as insolvency revelations mounted, with critics noting decisions under this duo delayed full disclosure of losses through accounting adjustments. Following Rato's exit, José Ignacio Goirigolzarri, a former BBVA executive, was appointed chairman on May 7, 2012, and immediately initiated a review that uncovered a €4.3 billion capital shortfall, escalating to a request for €19 billion in state aid by late May, prompting partial via the Fund for Orderly Restructuring (FROB). This shift marked a pivot in decision-making from prior opacity to collaboration with regulators, as Goirigolzarri's board, now influenced by FROB's 45% stake, prioritized stress-test compliance over preservation of legacy caja interests. Goirigolzarri's tenure, extending through Bankia's 2020 merger into , focused on rigorous restructuring: the board approved divestitures of non-core assets, closure of 1,120 branches (36% of network), and elimination of 4,600 jobs (23% of staff) by 2014, restoring profitability with €335 million net profit in 2014 and €1.05 billion in 2017. José Sevilla Álvarez, appointed CEO in 2015, complemented these efforts by driving cost efficiencies and , though ultimate strategic authority rested with Goirigolzarri, whose decisions emphasized capital strengthening via hybrid instruments and equity issuances post-bailout conversion. By 2020, the board's approval of the merger reflected a consensus on scale for competitiveness, with Goirigolzarri designated to chair the €17 billion combined entity.

Regulatory Oversight and Internal Controls

Bankia, as a systemic Spanish , fell under the prudential of the Banco de España, which monitored solvency, , and compliance with capital requirements, while the Comisión Nacional del Mercado de Valores (CNMV) oversaw market conduct, including the approval of its 2011 (IPO) prospectus. The Banco de España conducted on-site inspections and required periodic provisioning for impaired assets, particularly amid the post-2008 downturn, but enforcement was criticized for leniency toward undercapitalized entities like Bankia, formed from the 2010 merger of seven regional savings banks (cajas). In 2011, regulators cleared the IPO despite internal assessments flagging provisioning shortfalls estimated at billions of euros, allowing Bankia to raise €7 billion from retail and institutional investors. Post-IPO revelations in May 2012 exposed regulatory lapses, as Bankia's restated accounts shifted from a reported €309 million profit to a €4.3 billion loss, prompting a judicial probe into whether Banco de España and CNMV officials knowingly overlooked risks to facilitate the listing. Banco de España experts later identified accounting irregularities in Bankia's reformulated financials, including inadequate loss provisions and overstated asset values tied to exposures. This contributed to Bankia's via the Fondo de Reestructuración Ordenada Bancaria (FROB) in 2012, with €22.7 billion in public funds injected, highlighting oversight failures in enforcing early intervention under and national directives. Critics, including parliamentary inquiries, attributed these shortcomings to political influences over regional cajas and insufficient independence in supervisory actions, though Banco de España defended its role by noting repeated provisioning mandates issued to Bankia since 2010. Internally, Bankia's controls over financial reporting and proved deficient, as evidenced by pervasive errors in its and annual accounts, which auditors and Banco de España peritos deemed unreliable due to misclassified assets and understated impairments on €65 billion in real estate-linked loans. The function, tasked with evaluating and compliance, failed to prevent or timely detect these distortions, exacerbated by the challenges from disparate caja cultures lacking unified frameworks. Executive-level schemes, such as undeclared corporate credit cards disbursing €15.5 million to 86 managers between 2003 and 2012, further underscored breakdowns in expense authorization and ethical oversight, leading to criminal convictions in 2017 for . Post-bailout restructuring imposed enhanced internal controls, including independent audits and board-level committees, aligning with EU Capital Requirements Directive mandates, which helped restore compliance by 2014.

Controversies and Criticisms

Allegations of Misleading IPO Information

In July 2011, Bankia conducted its (IPO), issuing new shares that raised approximately €7 billion, with over half subscribed by around 300,000 retail investors. The IPO prospectus, approved by Spain's securities regulator CNMV and audited by , presented Bankia as financially robust, reporting a consolidated profit of €309 million for 2010 and emphasizing manageable exposure to Spain's sector despite the ongoing property market downturn. However, subsequent investigations by the revealed significant accounting irregularities in the 2010 , including the misclassification of high-risk loans as substandard rather than non-performing, improper handling of assets, and understatement of provisions for potential losses on -related exposures totaling billions of euros. These flaws portrayed the bank as profitable and stable, concealing its heavy reliance on €38 billion in loans amid a sector that eroded asset values. Allegations of misleading information surfaced prominently after Bankia's May 2012 request for a €19 billion government bailout, following a restatement of its 2011 accounts from a reported profit of €309 million to a €4.3 billion loss. Prosecutors and complainant group UPyD accused former chairman Rodrigo Rato and 33 other executives of fraud, falsifying corporate documents, and market manipulation by disseminating inaccurate financial data to inflate share prices during the IPO. The case highlighted how the prospectus omitted or downplayed the need for substantial capital injections to cover real estate impairments, leading to a rapid share price collapse from €3.70 at listing to under €1 by mid-2012, inflicting losses on retail investors who lacked access to internal risk assessments. A criminal trial in Spain's from 2019 to 2020 resulted in acquittals for all defendants in September 2020, with the determining that while the accounts contained errors, there was insufficient evidence of intentional deceit, as the information had been vetted by regulators and auditors. In contrast, civil proceedings affirmed the misleading nature of the prospectus; Spain's ruled in January 2016 that it invalidated due to erroneous , ordering repayments in test cases. Bankia subsequently settled with retail IPO investors, agreeing in 2016 to reimburse 100% of principal plus 1% annual interest, totaling around €2 billion in payouts by covering losses for those who held shares until the 2012 collapse. This compensation, funded partly by state proceeds, underscored the prospectus's role in directing undue risk to unsophisticated buyers while executives benefited from the listing's proceeds.

Preferential Shares Sales to Retail Investors

In the years leading up to its 2011 , Bankia and its predecessor entities, including Caja Madrid, issued participaciones preferentes (preferred shares or hybrid securities) as a means of raising capital amid Spain's banking sector strains. These instruments were extensively marketed to retail investors through Bankia branches, often presented as low-risk alternatives to traditional savings accounts or deposits, offering annual yields of around 5-7% with promises of capital preservation. By May 2011, Spanish banks collectively held approximately 22.5 billion euros in such preferred shares from roughly 686,000 retail investors, with Bankia accounting for a significant portion sold primarily to unsophisticated clients, including pensioners and small savers lacking financial expertise. Sales practices drew widespread criticism for inadequate risk disclosure, with branch managers incentivized to promote the products without fully explaining their subordinated nature—meaning they ranked below deposits and in scenarios and could absorb losses before equity holders. Internal documents reportedly encouraged targeting "small savers and families lacking financial knowledge," while over 96% of Bankia's preferred shares were placed with retail clients, totaling around 7 billion euros in hybrid products including preferentes and by mid-2013. This approach disproportionately affected conservative investors seeking steady income, as the securities were complex equity-like instruments unsuitable for those without tolerance for potential total loss, leading to allegations of systemic mis-selling across Spain's cajas network. Following Bankia's nationalization in May 2012 and subsequent 19-billion-euro government , preferred shares were restructured, converting them into common equity at steep discounts or writing down their value, resulting in near-total losses for holders. Approximately 250,000 to 300,000 Bankia retail investors, many with investments under 10,000 euros, saw their holdings—collectively worth billions—evaporate, exacerbating personal financial ruin amid Spain's economic crisis. The bailout prioritized taxpayer funds over these junior securities, as required by state aid rules, but left small investors bearing disproportionate costs despite initial assurances of safety. Legal repercussions included thousands of lawsuits claiming and , with courts ruling in favor of investors in cases where risks were not adequately communicated; for instance, a court ordered full restitution for select clients in 2013. The Spanish government established an scheme via the Fondo de Garantía de Inversiones to compensate small retail holders, prioritizing those with under 100,000 euros invested, though uptake was limited due to and lengthy processes—by early 2014, only about 50,000 holders had recovered principal, with preferred share victims faring worse. Bankia eventually settled with around 4,000 affected clients for full reimbursement to avert mass litigation, but broader recovery remained partial, highlighting flaws in retail investor protections and branch-level oversight.

Executive Misconduct and Credit Card Schemes

In October 2014, investigations revealed that 86 executives and board members of Caja Madrid—predecessor to Bankia—and Bankia itself had used undeclared prepaid corporate credit cards, known as "" or tarjetas opacas, for personal expenses totaling €15.5 million between and 2013. These cards were issued without oversight or declaration as , allowing recipients to spend on luxury items such as jewelry, high-end clothing, vacations, and while evading authorities. The scheme exemplified a culture of unchecked perks among senior leadership, with spending often exceeding €100,000 per individual; for instance, former Bankia president personally expended €99,000 over two years (2011–2012) on items including designer bags and five-star hotel stays. The cards operated as anonymous, reloadable instruments not linked to official payroll or , shielding users from and public scrutiny. Prosecutors argued this constituted corporate , as the expenditures diverted funds from the during a period of mounting financial distress leading to Bankia's 2012 bailout. Among the 65 defendants tried starting in September 2016 (after one reduced the initial 66), notable figures included politicians, union leaders, and business executives appointed to boards via Spain's regional quota system, highlighting flaws in the savings bank model. Legal consequences followed: In February 2017, Rato received a 4.5-year prison sentence for related to the cards, later upheld on in 2018, with him beginning his term in October 2018. Other executives faced sentences ranging from fines to , though many appealed; the court emphasized the intentional concealment, as card users signed no receipts and failed to report benefits to officials despite values exceeding €12 million in aggregate personal outlays. This compounded broader probes into Bankia , including Rato's separate 2018 conviction for in the bank's 2011 IPO, underscoring systemic ethical lapses that eroded amid Spain's banking crisis.

Customer Service and Ethical Lapses

Bankia encountered substantial customer dissatisfaction with its service quality, evidenced by a high volume of formal complaints and low resolution rates. In 2014, the bank's dedicated Customer Attention Service processed 48,298 reclamations concerning core banking operations, dismissing 74% without resolution or compensation. This reflected broader systemic shortcomings, as the Bank of Spain repeatedly issued warnings to Bankia for deficient complaint-handling procedures, with the institution rectifying far fewer grievances than regulatory expectations or peer banks demanded. Ethical concerns amplified these service failures, particularly around opaque practices that eroded customer trust. Prior to the 2012 bailout, Bankia ranked among the worst performers in a survey for imposing hidden charges and abusive fees on retail clients, contributing to perceptions of exploitative conduct. In response to mounting internal reports of improper sales, the bank in October 2013 implemented a policy barring employees from financial products to inadequately informed customers and launched an anonymous whistleblower hotline for staff and suppliers to flag ethical breaches. Such measures implicitly acknowledged prior lapses in prioritizing sales targets over client suitability assessments. The 2012 crisis period intensified service disruptions, with inadequate communication about the request fueling panic and withdrawal rushes at branches, though no capital controls were imposed. Subsequent compensation efforts for affected savers, overseen by state auditors, faced skepticism; many retail investors bypassed the scheme—capped at partial refunds determined by —opting instead for costly court actions due to doubts over fairness and transparency. These episodes underscored a of prioritizing institutional over proactive, equitable remediation, further damaging Bankia's for ethical .

Economic Role and Impact

Contribution to Spanish Financial Crisis Dynamics

Bankia, formed in December 2010 through the merger of seven regional savings banks including Caja Madrid and Bancaja, inherited substantial vulnerabilities from Spain's pre-crisis lending practices, particularly heavy exposure to the real estate sector that fueled the property bubble from the mid-2000s. As Spain's fourth-largest bank and largest mortgage lender, Bankia held approximately $47.18 billion in real estate-related loans by early 2012, with 84.7% of those classified as non-performing amid the post-2008 bust. This overexposure stemmed from the cajas' aggressive financing of construction and development during the boom, enabled by regulatory and political influence in governance, which delayed recognition of losses and perpetuated insolvency risks across the sector. The bank's troubles intensified systemic pressures in early 2012, as solvency concerns eroded investor confidence, triggering a sharp decline in Bankia shares and broader market turmoil. On May 9, 2012, the Spanish government partially nationalized Bankia via a €4.5 billion capital injection into its parent BFA, followed by a €23.5 billion bailout request on May 25, exposing hidden losses that reached €19.2 billion for 2012—the largest ever recorded by a Spanish corporation. These events amplified the banking crisis by signaling deeper rot in consolidated entities like Bankia, which had been positioned as a stabilization tool but instead concentrated toxic assets, straining public finances and elevating Spain's borrowing costs as risk premiums surged. Bankia's near-collapse contributed to the sovereign-bank feedback loop, necessitating a €41 billion recapitalization for Spanish banks in June 2012, with Bankia absorbing a significant portion after transferring €22.4 billion in assets to the state-backed SAREB. By exemplifying governance failures—such as politically appointed executives prioritizing regional interests over prudent —Bankia underscored how fragmented cajas mergers failed to resolve underlying imbalances, prolonging and contributing to an estimated €80 billion total cost to the Spanish financial system. This dynamic eroded depositor trust and forced accelerated sector consolidation, reducing the number of cajas from 45 to seven by 2014.

Effects of Bailout on Taxpayers and Economy

The Spanish government injected approximately €23.5 billion into in May 2012 through the Fund for Orderly Bank Restructuring (FROB), comprising €4.5 billion in prior capital and an additional €19 billion to cover losses and recapitalize the bank, resulting in its effective . This infusion, drawn from public funds, directly burdened taxpayers by increasing sovereign debt, as the was financed through government borrowing amid Spain's fiscal constraints. The net fiscal impact on taxpayers remained substantial despite partial recoveries. By , Spain's Audit Court estimated the state's contribution to the broader restructuring, including Bankia, at €41.8 billion out of a total €60.7 billion cost, with Bankia's specific net loss to the government pegged at €17.2 billion after accounting for asset sales and dividends. Recoveries included a 2014 sale of a 7.5% stake in Bankia for €1.3 billion, but by 2016, only about 5% (€2.7 billion) of the €51.3 billion total banking sector had been recouped, leaving the remainder as a permanent liability equivalent to foregone public services or higher taxes. On the economy, the bailout amplified Spain's sovereign debt crisis, pushing the debt-to-GDP ratio from 36% pre-crisis to 84% by 2013 and contributing to a "doom loop" where banking sector woes eroded fiscal space, prompting austerity measures that deepened the recession with GDP contracting 1.2% in 2012 and unemployment exceeding 25%. While it averted a systemic banking collapse—Bankia returned to profitability by 2013 with €362 million net profit in the first nine months—the intervention fostered moral hazard by shielding mismanagement without full private sector accountability, strained credit markets, and indirectly necessitated Spain's €41 billion EU financial sector bailout in June 2012, further tying economic recovery to external conditions.

Achievements in Banking Consolidation and Stability

Bankia played a central role in the early stages of Spanish banking consolidation by facilitating the integration of seven regional s—Caja Madrid, Bancaja, Caja de Ávila, Caixa Laietana, Caja , Caja Rioja, and Caja Guadalajara—into a single national entity through an Institutional Protection Scheme (SIP) finalized on December 31, 2010. This merger combined assets exceeding €300 billion, creating Spain's fourth-largest bank by assets at the time and reducing fragmentation in the savings bank sector, which comprised around 45 entities prior to the crisis-driven reforms. The initiative aligned with regulatory mandates from the to address inefficiencies, overexposure to , and governance weaknesses in regional cajas, thereby promoting and centralized . Following its 2012 nationalization and recapitalization under the Fund for Orderly Bank Restructuring (FROB)—which injected approximately €23.5 billion in public funds as part of a broader €41 billion sector program—Bankia underwent extensive restructuring measures, including asset disposals, branch network rationalization (reducing over 1,800 branches by 2014), and workforce reductions of about 6,000 employees. These steps enhanced , with operating costs declining by roughly 2% annually post-2014, and strengthened capital buffers, achieving a fully loaded CET1 above 12% by 2018. ratios fell from peaks over 13% in 2013 to under 4% by 2019, contributing to systemic and reduced contagion risks in the Spanish banking sector. Bankia's reforms supported broader stability goals, as evidenced by its role in the European Stability Mechanism-assisted program, which overall fortified Spanish banks' solvency and reduced the number of credit institutions from over 40 to around 10 major groups by 2020, with the top five controlling 84% of assets. Credit ratings agencies noted improvements in Bankia's standalone profile, with upgrades reflecting prudent provisioning and low cost of risk amid cyclical lows in the sector. While initial merger challenges exposed underlying weaknesses, the entity's evolution from a crisis epicenter to a restructured player underscored the efficacy of consolidation in mitigating moral hazard and fostering resilience against real estate downturns.

Merger with CaixaBank and Legacy

Merger Negotiations and Regulatory Approval

Negotiations for the merger between and Bankia commenced in early September 2020, amid Spanish government encouragement for banking sector consolidation to enhance resilience following the economic shock and lingering effects from the 2012 bailout of Bankia. On , 2020, reports emerged of exploratory talks for an all-share transaction valuing Bankia at approximately €4.3 billion, with absorbing Bankia to form Spain's largest domestic lender by assets. The discussions involved Bankia's , the Spanish state via the Fund for the Orderly Restructuring of the Banking Sector (FROB), which held about 61% of Bankia post-bailout, ensuring alignment with objectives such as synergies estimated at €850 million annually. The boards of directors of both entities approved the joint merger plan on September 17, 2020, establishing an exchange ratio of 0.6845 new shares for each Bankia share, representing a 20% premium over pre-announcement levels. This ratio was derived from independent valuations considering assets, profitability, and market conditions as of June 30, 2020, with confirming no material discrepancies. The plan was published on both banks' websites on September 18, 2020, outlining the absorption structure without cash consideration, aiming for completion in the first quarter of 2021 pending approvals. Shareholder approvals followed, with Bankia's general meeting endorsing the merger on December 1, 2020, and CaixaBank's on December 3, 2020, both with overwhelming majorities exceeding 95% in favor, reflecting investor support for the anticipated scale benefits in a low-interest-rate environment. Regulatory scrutiny focused on and , with the Comisión Nacional de los Mercados y la Competencia (CNMC) granting phase I approval on March 23, 2021, subject to commitments including divestitures of overlapping branches (approximately 500) and asset sales to mitigate market concentration in certain regions. Additional clearances from the under the Single Supervisory Mechanism and the addressed prudential concerns, confirming the merger's viability without systemic risks, leading to final registration of the merger deed on March 26, 2021. Bankia shares ceased trading that day, with new CaixaBank shares issued to complete the integration.

Integration Process and Cost Synergies

The integration of Bankia into following the merger's completion in March 2021 emphasized operational streamlining, including the rationalization of branch networks and workforce adjustments to eliminate redundancies. A key component involved closing 1,534 branches, representing approximately 27% of the combined entity's office network, to adapt to trends and reduce overhead costs. Workforce restructuring formed the core of cost-saving measures, with an initial plan announced in April 2021 targeting 8,291 job eliminations through voluntary redundancies and early retirements, marking one of Spain's largest corporate staff overhauls. After negotiations with unions amid strikes, the final agreement reached on July 1, 2021, reduced redundancies to 6,452 positions, a 22% cut from the original proposal, while incorporating enhanced severance terms and outplacement support. This adjustment preserved approximately 1,839 jobs compared to initial targets. Cost synergies were projected at €770 million annually by 2023 upon merger announcement in September 2020, primarily from branch and personnel efficiencies, with later upward revisions to €940 million reflecting accelerated integration progress. By 2022, these efforts contributed to a 5.6% reduction in expenses year-over-year and supported a 29.7% like-for-like profit increase to €3.15 billion, driven by realized integration benefits alongside commercial growth. The process also generated €4.3 billion in negative goodwill from asset revaluations, providing an accounting boost without direct cash impact.

Long-Term Outcomes and Dissolution

Following the completion of the merger on March 26, 2021, Bankia was dissolved without liquidation, with its assets and liabilities fully transferred to CaixaBank via absorption under Spanish corporate law. Bankia shares ceased trading on the Madrid Stock Exchange that day, while new CaixaBank shares issued in exchange (at a ratio of 0.6845 CaixaBank shares per Bankia share) began trading immediately thereafter. This process finalized Bankia's legal extinction, registered through a universal deed with the Spanish Commercial Registry, marking the end of its independent operations after nearly a decade of state intervention stemming from the 2012 bailout. The merged achieved market leadership in , with €623.8 billion in total assets, nearly 20 million clients, and a exceeding €20.5 billion as of the merger's close. Integration synergies from the merger, including cost reductions estimated at up to €500 million annually through branch rationalization (potentially closing 50% of overlapping locations) and staff efficiencies, bolstered profitability; reported an attributable profit of €3.15 billion in 2022, a 29.7% like-for-like increase driven partly by these gains, though offset by one-time merger-related accounting charges. Rating agency Fitch affirmed 's long-term issuer default rating at 'A-' post-merger, citing enhanced scale and resilience in a consolidating sector. However, long-term outcomes included adverse effects on and access to , with the Spanish government conceding in 2025 that the merger reduced small and medium-sized enterprise (SME) financing availability due to decreased branch density and lending incentives in overlapping regions. Workforce impacts were significant, involving thousands of redundancies as part of efficiency drives, exacerbating pressures in a post-crisis . The state's ownership in diluted to approximately 16.1% by late 2022, facilitating partial of bailout assets but leaving lingering fiscal costs from the original €23.5 billion recapitalization of Bankia in 2012, much of which was recovered through share sales prior to dissolution. Bankia's legacy post-dissolution resides in CaixaBank's dominance in retail banking, where it captured over 25% market share in deposits and loans, contributing to sector stability amid European regulatory pressures for consolidation. Yet, the merger underscored trade-offs in banking efficiency versus local economic support, with reduced SME lending highlighting how scale advantages can concentrate credit risk and limit decentralized financing in peripheral areas. Overall, the dissolution resolved Bankia's viability issues but embedded its bailout-era burdens into a larger entity, prioritizing systemic resilience over granular retail impacts.

References

  1. https://elischolar.library.yale.edu/cgi/viewcontent.cgi?article=1546&context=journal-of-financial-crises
  2. https://www.thebanker.com/content/4644a66f-fd8f-50b0-a3dd-387cd7394e73
  3. https://2009-2017.state.gov/documents/organization/228814.pdf
  4. https://finance.yahoo.com/news/bankia-presented-flawed-accounts-ipo-172724207.html
  5. https://www.bloomberg.com/news/articles/2012-05-16/bankia-ipo-leaves-shareholders-2-billion-poorer-after-bailout
  6. https://www.reuters.com/article/spain-bankia/bank-of-spain-defends-oversight-of-bankia-after-ipo-probe-idUSL6N0TV2Q820141211/
  7. https://www.bbc.com/news/world-europe-54338784
  8. https://ec.europa.eu/dgs/economy_finance/evaluation/pdf/spain_final_report_en.pdf
  9. https://www.caixabank.com/en/headlines/news/caixabank-completes-legal-procedures-for-merger-with-bankia-to-become-the-leading-bank-in-spain
  10. https://www.cnn.com/2020/09/18/business/caixabank-bankia-merger
  11. https://www.esm.europa.eu/publications/safeguarding-euro/spain-banks-esm-first-programme
  12. https://business.columbia.edu/sites/default/files-efs/pubfiles/6162/Santos-March-2014.pdf
  13. https://www.highperformr.ai/company/caja-madrid
  14. https://www.relbanks.com/europe/spain/bancaja
  15. https://english.elpais.com/elpais/2012/06/12/inenglish/1339497091_306478.html
  16. https://pdfs.semanticscholar.org/239a/5ca59a055be90b838a4c941ee13abee818f0.pdf
  17. https://www.npr.org/sections/money/2012/06/13/154791507/spains-bank-yenta-on-what-went-wrong
  18. https://www.reuters.com/article/world/europe/factbox-spain-savings-banks-recapitalisation-plans-idUSLDE73R1GJ/
  19. https://www.bloomberg.com/news/articles/2012-05-08/bankia-shake-up-no-spain-panacea-without-action-on-assets
  20. https://www.reuters.com/article/markets/spains-caja-madrid-merger-relaunches-as-bankia-idUSLDE72116O/
  21. https://ec.europa.eu/competition/state_aid/cases/245134/245134_1341455_209_1.pdf
  22. https://www.fitchratings.com/research/banks/fitch-rates-banco-financiero-y-de-ahorros-group-a-downgrades-banco-de-valencia-to-bbb-04-02-2011
  23. https://ec.europa.eu/competition/state_aid/cases/246568/246568_1406507_239_4.pdf
  24. https://www.wsj.com/articles/SB10001424052702303795304576453593068908876
  25. https://english.elpais.com/elpais/2011/07/18/inenglish/1310966452_850210.html
  26. https://www.reuters.com/article/2011/07/15/bankia-ipo-idUSL6E7IF1KS20110715
  27. https://www.bloomberg.com/news/articles/2011-07-18/bankia-offers-ipo-at-32-less-than-peers-amid-spain-debt-crisis
  28. https://english.elpais.com/elpais/2011/07/20/inenglish/1311139252_850210.html
  29. http://www.marketwatch.com/story/bankia-shares-drift-lower-in-madrid-debut-2011-07-20
  30. https://www.rte.ie/news/business/2011/0720/303949-spain-business/
  31. https://www.marketwatch.com/story/bankia-board-oks-ipo-launch-2011-06-28
  32. https://www.bbc.com/news/business-17981933
  33. https://www.nytimes.com/2012/05/08/business/global/bank-chief-steps-down-as-spain-considers-rescue.html
  34. https://www.reuters.com/article/business/spain-takes-over-bankia-to-steady-ailing-sector-idUSL5E8GA29J/
  35. https://www.theguardian.com/business/2012/may/10/spanish-government-rescues-fourth-largest-bank-bankia
  36. https://newbagehot.yale.edu/docs/spain-bfa-bankia-group-restructuring-2012/
  37. https://www.bbc.com/news/business-18213848
  38. https://english.elpais.com/elpais/2012/05/28/inenglish/1338216638_621395.html
  39. https://www.jec.senate.gov/public/index.cfm/republicans/2012/8/the-spanish-financial-crisis
  40. https://m.naharnet.com/stories/en/116958-bankia-reports-return-to-profit-in-2013-year-after-rescue
  41. https://www.reuters.com/article/bankia-results-idUKE8N1E800E/
  42. https://bsic.it/a-tale-of-national-consolidation-caixabanks-merger-with-bankia/
  43. https://www.wsj.com/articles/SB10001424052702303442704579360052952568082?gaa_at=eafs&gaa_n=AWEtsqc9JGTt_iGWFS8v0ecOWEwrFj_YmLGLca5-WV6iIe4_caI0GIsoq690&gaa_ts=68ff94b3&gaa_sig=yzy2UeGbuYqNx5Mi7vf_VKH8Kbn6aoN65UlAqNpu5C9IiATaCUZVYicPeBWsnqxYlugLuhbBZEBEVI8dGU6lDQ%253D%253D
  44. https://www.reuters.com/article/world/uk/spain-s-bankia-2014-results-hit-by-compensation-provisions-idUSKBN0LW09Q/
  45. https://www.reuters.com/article/markets/spains-bankia-posts-40-pct-profit-jump-in-2015-idUSE8N14701R/
  46. https://www.youtube.com/watch?v=a_fWLuz0fCY
  47. https://english.elpais.com/elpais/2017/01/11/inenglish/1484125815_626310.html
  48. https://www.reuters.com/article/business/spain-s-bankia-to-repay-2-5-billion-euros-to-shareholders-over-next-three-years-idUSKCN1GB0SW/
  49. https://www.scoperatings.com/ScopeRatingsApi/api/downloadanalysis?id=36639065-e23e-4a71-9941-7fb449347eb7
  50. https://www.frob.es/wp-content/uploads/2023/05/20190610-MactividadesFROB2018_ENG.pdf
  51. https://www.fitchratings.com/research/banks/fitch-upgrades-bankia-to-bbb-outlook-stable-30-01-2019
  52. https://www.caixabank.com/deployedfiles/caixabank/Estaticos/PDFs/Informacion_accionistas_inversores/Cuentas_individuales_2018_Bankia_EN.pdf
  53. https://www.cnmv.es/webservices/verdocumento/ver?e=pSaTB/YCZtP32jm7AaoxU6fqoTZheLsWaW8eg8EG1exQSRh0dt1K2vXNhAR3mLSV
  54. https://english.elpais.com/spanish_news/2020-09-04/caixabank-bankia-in-talks-for-merger-that-would-create-spains-biggest-lender.html
  55. https://www.scopegroup.com/ScopeGroupApi/api/analysis?id=645e8775-2b58-4b41-8b74-128a17e0635d
  56. https://www.sec.gov/Archives/edgar/data/1829323/000095010320021333/dp139918_ex0122.htm
  57. https://www.caixabank.com/deployedfiles/caixabank_com/Estaticos/PDFs/Accionistasinversores/consolidated-financial-statements-2020.pdf
  58. https://run.unl.pt/bitstream/10362/16721/1/Fragoso_2016.pdf
  59. https://fdic.gov/system/files/2024-07/bankia-165-1412.pdf
  60. https://www.caixabank.com/deployedfiles/caixabank_com/Estaticos/PDFs/Accionistasinversores/Emisiones_CaixaBank/2_Supl_EMTN_2018_EN.pdf
  61. https://www.lobbyfacts.eu/datacard/bankia-sa?rid=957804727423-91&sid=100626
  62. https://dbrs.morningstar.com/issuers/18845/bankia-sa
  63. https://www.ncrvoyix.com/newsroom/bankia-spain-improves-customer-service-and-account-access-with-ncr-technology?srsltid=AfmBOopkYTRiuGRx57APOKmUlN2V-6tWNnsuHUliQHfpva2cZJeN_zz2
  64. https://www.gft.com/us/en/insights/success-stories/bankia-boosts-customer-service-with-google-assistant
  65. https://www.scoperatings.com/ScopeRatingsApi/api/downloadstudy?id=c5384ee0-53dc-46be-b41c-dba244ecdc65
  66. https://www.avaloq.com/insights/press-releases/bankia-accelerates-democratization-of-wealth-management-with-avaloq
  67. https://www.bis.org/fsi/fsicms4.pdf
  68. https://pmc.ncbi.nlm.nih.gov/articles/PMC7320873/
  69. https://www.bloomberg.com/news/articles/2018-11-26/ex-officials-stand-trial-on-bankia-ipo-that-sparked-spain-crisis
  70. https://www.ft.com/content/ff2807ba-8301-11e0-85a4-00144feabdc0
  71. https://www.bloomberg.com/news/articles/2011-05-20/bankia-to-name-francisco-verdu-ceo-mundo-reports
  72. https://www.bizjournals.com/southflorida/blog/morning-edition/2012/07/city-national-parent-bankia-ceo-resigns.html
  73. https://www.dw.com/en/head-of-spanish-crisis-stricken-banking-group-resigns/a-15934803
  74. https://www.realinstitutoelcano.org/en/analyses/spains-banking-crisis-a-light-in-the-tunnel/
  75. https://www.euromoney.com/article/27bjsstsqxhkmh0wsdk6m/banking/bankias-alvarez-saving-the-bank-that-didnt-exist/
  76. https://www.cnmv.es/WebServices/VerDocumento/Ver?t=%257B5d6392ed-e3a5-46a2-9d29-da3ed580461f%257D
  77. https://www.bde.es/wbe/en/areas-actuacion/supervision-entidades-financieras/
  78. https://www.lexology.com/library/detail.aspx?g=85bbe480-3387-4bc3-ae58-ba1da0d3315b
  79. https://elpais.com/economia/2020-08-29/radiografia-del-error-bankia.html
  80. https://www.cnbc.com/2017/02/14/spanish-court-orders-criminal-inquiry-into-oversight-of-bankia-ipo.html
  81. https://www.nytimes.com/2017/02/13/business/spain-bankia-ipo.html
  82. https://english.elpais.com/elpais/2013/02/21/inenglish/1361449270_133504.html
  83. https://www.reuters.com/article/business/peritos-del-banco-de-espaa-ven-errores-en-las-cuentas-reformuladas-de-bankia-idUSKCN0JI1CC/
  84. https://wolfstreet.com/2016/06/08/next-banking-scandal-in-spain-banco-popular/
  85. https://pmc.ncbi.nlm.nih.gov/articles/PMC7320872/
  86. https://www.linkedin.com/pulse/20141204212113-294356261-bankia-accounts-for-2010-and-2011-deemed-plagued-with-errors?trk=articles_directory
  87. https://repositori.upf.edu/bitstreams/71508b1b-b72c-45d1-99bb-3bee9efe095f/download
  88. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3176481
  89. https://www.wsj.com/articles/bankia-accounts-for-2010-and-2011-deemed-plagued-with-errors-1417722136
  90. https://www.wsj.com/articles/SB10001424052702303444204577458553768029114
  91. https://www.reuters.com/world/asia-pacific/ex-imf-head-rato-acquitted-over-bankia-ipo-prompts-legal-change-calls-2020-09-29/
  92. https://english.elpais.com/spanish_news/2020-09-29/ex-imf-chief-rodrigo-rato-acquitted-over-bankia-ipo-fiasco.html
  93. https://www.nytimes.com/2016/01/28/business/spanish-supreme-court-orders-bankia-to-repay-2-investors-in-its-ipo.html
  94. https://www.ft.com/content/a9a66274-d567-11e5-829b-8564e7528e54
  95. https://m.naharnet.com/stories/en/209617-spain-s-bankia-says-has-paid-1-2-bn-euros-over-failed-listing
  96. https://financialpost.com/news/economy/spains-bailout-forces-mountain-of-losses-on-bank-clients
  97. https://www.euronews.com/business/2013/04/24/spaniards-ruined-in-banks-preferential-share-scheme-feel-betrayed
  98. https://www.reuters.com/article/bankia/update-2-bankia-shares-plunge-as-rescue-wipes-out-investors-idUSL5N0CH1AP20130325/
  99. https://catalystsforcollaboration.org/case-study-bankia-corruption-scandal/
  100. https://www.elmundo.es/elmundo/2013/09/12/economia/1378997316.html
  101. https://www.expansion.com/2013/05/13/empresas/banca/1368468289.html
  102. https://www.bbc.com/news/world-europe-37470509
  103. https://alternativaseconomicas.coop/articulo/el-tema-del-mes/bankia-cede-por-temor-a-un-alud-de-pleitos
  104. https://www.reuters.com/article/us-bankia-idUSBRE94I04020130519/
  105. https://cincodias.elpais.com/cincodias/2014/01/03/mercados/1388769226_574015.html
  106. https://www.bankinter.com/blog/lo-ultimo/m-225-s-de-4-000-clientes-de-bankia-han-recuperado-ya-el-total-de-su-inversi-243-n-en-preferentes
  107. https://english.elpais.com/elpais/2014/10/02/inenglish/1412258921_975122.html
  108. https://www.theguardian.com/business/2014/oct/09/former-caja-directors-accused-credit-card-misuse-bankia
  109. https://www.theguardian.com/business/2016/sep/25/former-imf-head-rodrigo-rato-on-trial-over-bankers-luxury-sprees
  110. https://english.elpais.com/elpais/2016/09/26/inenglish/1474902184_160485.html
  111. https://www.aljazeera.com/economy/2017/2/23/ex-imf-boss-rato-sentenced-to-jail-for-embezzlement
  112. https://www.occrp.org/en/news/spain-ex-imf-chief-sentenced-to-jail-for-embezzlement
  113. https://finance.yahoo.com/news/ex-imf-boss-rato-sentenced-132706912.html
  114. https://www.euractiv.com/news/former-imf-chief-to-serve-four-years-in-prison-over-black-cards-case/
  115. https://www.france24.com/en/live-news/20241220-ex-imf-chief-rato-gets-four-year-jail-term-in-spain-for-tax-crimes
  116. https://abogadosnuma.es/bankia-rechazo-el-74-de-las-quejas-de-sus-clientes-en-2014
  117. https://www.infolibre.es/economia/popular-bankia-entidades-apercibe-banco-espana-quejas-clientes-rectifican_1_1163841.html
  118. https://www.elmundo.es/economia/2017/03/09/58c069bf268e3ea4288b459e.html
  119. https://english.elpais.com/elpais/2011/09/05/inenglish/1315200043_850210.html
  120. https://www.elmundo.es/elmundo/2013/10/17/economia/1382000276.html
  121. https://www.reuters.com/article/world/special-report-how-spain-dumped-a-bad-bank-on-the-little-guy-idUSBRE86Q081/
  122. https://www.reuters.com/article/us-bankia-idUSBRE94I04020130519
  123. https://www.reuters.com/article/markets/bankia-compensation-qualms-signal-loss-of-faith-in-spain-s-banks-idUSL6N0DY0YV/
  124. https://knowledge.wharton.upenn.edu/article/is-the-nationalization-of-bankia-the-start-of-a-true-financial-restructuring-for-spain/
  125. https://business.columbia.edu/sites/default/files-efs/pubfiles/25448/El-Diluvio-05-20-2017-Part-II-L.pdf
  126. https://www.theguardian.com/business/2013/feb/28/bankia-results-worst-ever-losses
  127. https://www.nytimes.com/2012/05/28/business/global/bankias-president-portrays-an-upside-to-a-bailout.html
  128. https://www.nytimes.com/2012/06/13/business/global/bailout-in-spain-leaves-taxpayers-holding-the-bag.html
  129. https://www.bloomberg.com/news/articles/2014-02-27/spain-starts-sale-of-7-5-stake-in-nationalized-lender-bankia
  130. https://english.elpais.com/elpais/2016/09/06/inenglish/1473165936_256918.html
  131. https://pmc.ncbi.nlm.nih.gov/articles/PMC7320871/
  132. https://www.jec.senate.gov/public/_cache/files/27a9d1b4-e654-4528-89b6-cd874a8474c1/spanish-crisis-update-final.pdf
  133. https://www.dw.com/en/spanish-lender-bankia-turns-corner-after-massive-bailout/a-17187327
  134. https://www.npr.org/sections/parallels/2014/01/23/264909007/spain-exits-bailout-in-a-sign-of-progress-not-full-recovery
  135. https://www.imf.org/external/pubs/ft/scr/2012/cr12141.pdf
  136. https://www.bde.es/f/webbde/Secciones/Publicaciones/InformesBoletinesRevistas/InformesEstabilidadFinancera/21/FSR_2021_1_Box2_4.pdf
  137. https://www.esm.europa.eu/assistance/spain
  138. https://www.uk.daiwacm.com/media/283139/daiwa-europe-spanish-banking-sector-overview_feb2025_-eng-.pdf
  139. https://www.focusfinance.org/post/caixabank-s-4-3-billion-eur-acquisition-of-bankia
  140. https://www.macaubusiness.com/spains-caixabank-bankia-green-light-mega-merger/
  141. https://www.bloomberg.com/news/articles/2020-09-03/spain-s-bankia-and-caixabank-explore-potential-all-share-merger
  142. https://www.caixabank.com/en/headlines/news/caixabank-and-bankia-boards-of-directors-approve-merger-plan-to-create-spains-leading-bank
  143. https://www.sec.gov/Archives/edgar/data/1829323/000095010320020573/dp139202_cba-ex0105.htm
  144. https://www.sec.gov/Archives/edgar/data/1825259/000095010320018386/dp136990_ex0101.htm
  145. https://www.cnmv.es/webservices/verdocumento/ver?t=%257Bd65d119d-44d4-4565-bab9-f62014fa739e%257D
  146. https://www.rappler.com/business/shareholders-spain-caixabank-approve-bankia-merger-december-3-2020/
  147. https://www.reuters.com/article/business/spanish-regulator-approves-bankia-caixabank-merger-with-conditions-idUSKBN2BF2HZ/
  148. https://www.cnmc.es/sites/default/files/editor_contenidos/Notas%2520de%2520prensa/2021/20210324_NP_CAIXABANK_BANKIA_ENG.pdf
  149. https://english.elpais.com/economy_and_business/2021-04-20/spains-caixabank-planning-over-8000-job-cuts-in-bankings-biggest-staff-reduction.html
  150. https://www.businesstimes.com.sg/companies-markets/banking-finance/caixabank-plans-more-than-8000-job-cuts-in-one-of-spains-biggest-staff-overhauls
  151. https://financialpost.com/pmn/business-pmn/caixabank-plans-more-than-8000-job-cuts-in-one-of-spains-biggest-staff-overhauls
  152. https://www.caixabank.com/en/headlines/news/caixabank-and-trade-unions-reach-a-labour-agreement-for-the-restructuring-of-the-bank
  153. https://www.reuters.com/article/business/caixabank-to-cut-6-450-jobs-in-spain-s-biggest-banking-staff-overhaul-idUSKCN2E753G/
  154. https://www.reuters.com/markets/us/caixabank-reduce-planned-job-cuts-by-1300-following-strike-2021-06-22/
  155. https://www.reuters.com/world/asia-pacific/caixabank-bankia-merger-numbers-2020-09-18/
  156. https://www.reuters.com/article/business/caixabank-revises-up-costs-savings-from-bankia-acquisition-idUSL8N2P60W0/
  157. https://gfmag.com/banking/interview-caixabank-ceo-gonzalo-gortazar/
  158. https://www.caixabank.com/en/headlines/news/caixabank-posts-a-profit-of--3-15-billion-in-2022-up-29-7-on-a-like-for-like-basis-driven-by-commercial-strength-and-integration-synergies
  159. https://www.caixabank.com/docs/comunicacion/70574.pdf
  160. https://www.lacamara.com.au/caixabank-completes-legal-procedures-for-merger-with-bankia-to-become-the-leading-bank-in-spain/
  161. https://www.catalannews.com/business/item/caixabank-completes-fusion-with-bankia-to-become-largest-financial-institution-in-spain
  162. https://www.reuters.com/business/finance/more-bank-mergers-loom-bankia-caixabank-eye-big-savings-2020-09-04/
  163. https://www.caixabank.com/StaticFiles/pdfs/220128_OIR_InformeFinanciero_4T21_en.pdf
  164. https://en.ara.cat/economy/the-state-acknowledges-that-the-caixabank-bankia-merger-reduced-financing-for-smes_1_5426864.html
  165. https://www.euromoney.com/article/28teruws4k57c6i6jyj29/awards/awards-for-excellence/the-worlds-best-bank-transformation-2021-caixabank-clinches-the-spanish-crown/
  166. https://www.caixabank.com/en/headlines/news/caixabank-declares-that-the-merger-with-bankia-will-ultimately-create-a-stronger-more-efficient-and-more-profitable-institution
Add your contribution
Related Hubs
User Avatar
No comments yet.