Troubled Bankia prepares to sell corporate stakes

Bailed-out Spanish lender Bankia is preparing to sell stakes it holds in companies to meet European competition rules after a state rescue that has so far cost €23.5 billion (£18.8bn).

The group’s president said it will look to start a sale process soon and added that it had written-down values of its blue-chip portfolio accordingly.

Among the newly-recognised potential losses are Bankia’s €1.6bn write-down on corporate stakes, including a 12 per cent chunk of British Airways parent International Airlines Group and 5.3 per cent of energy firm Iberdrola, which owns ScottishPower.

Bankia’s parent, BFA, asked for a higher-than-expected €19bn from the Spanish government on Friday, in addition to €4.5bn the state has already pumped in, to cover possible losses on repossessed property, loans and investments.

The group, which restated its 2011 accounts to reflect a €3bn loss rather than the previously reported €300 million profit, said European Union regulators will sign off on the rescue plan in June.

Under Spanish law the state should sell its stake in Bankia within three years.