Spain’s fourth-largest financial institution said Friday that it needs an additional 19 billion euros ($23.77 billion) from the government to boost loss provisions.
Nationalized earlier this month, BFA-Bankia is seeking what would be the largest bank bailout in Spanish history.
The request for funds is more than double the amount Economy Minister Luis de Guindos cited Wednesday in comments to Spanish lawmakers.
BFA, the group’s corporate parent, said 6.7 billion euros of the new money will compensate for a decline in the market value of Bankia and other holdings.
BFA management had valued its Bankia shares at 12 billion euros, even though the bank’s current market value figure is less than 1.5 billion euros.
The first order of business, BFA said, is completing the nationalization process, which consists of converting into shares the 4.46 billion euro ($5.77 billion) loan the institution received in late 2008 from the state-backed Fund for Orderly Bank Restructuring, or FROB.
The 19 billion euros in additional funds would also be channeled through the FROB, BFA-Bankia said.
“The clients of Bankia can have absolute confidence that their savings are now more secure and guaranteed than ever,” the institution’s new CEO, Jose Ignacio Goirigolzarri, said.
Bankia also disclosed Friday that it sustained a loss of 2.97 billion euros in 2011, not the 309 million euro profit reported in February by the bank’s previous management.
The troubled bank likewise announced the departure of 16 directors from the seven savings banks that merged in 2010 to form Bankia.
Bankia holds Spain’s largest mortgage portfolio.
Spain’s banks have been hard hit by the collapse of the country’s 1995-2007 real estate boom.
The 2008 global financial meltdown came as Spain was struggling with the bursting of the property bubble. The ensuing slump has led to numerous business failures and pushed the country’s jobless rate above 24 percent.
Nearly half of Spaniards under 25 are jobless and tens of thousands of families have been evicted from their homes after falling behind on their mortgages.
Bankia and three other Spanish banks - Banco Civica, Banco Popular and Bankinter - saw their bonds downgraded by rating agency Standard and Poor’s on Friday to junk status.
The Iberian nation’s two leading financial institutions, Grupo Santander and BBVA, maintained their current ratings of A- and BBB+, respectively.