Spain takes state control of fourth-biggest bank, Bankia

[FarCenter]

AFP - The Spanish state will take control of the fourth-biggest listed bank, Bankia, the government said Wednesday, as it races to shore up the bank's bad loan-ridden balance sheet.

The state would take a 45-percent stake by converting a state-backed loan of 4.465 billion euros ($5.8 billion) into shares, "meaning it will take control", the economy ministry said in a statement.

The dramatic but widely telegraphed move comes two days before the government is to announce broad banking reforms to ease the crushing burden of loans extended during a property bubble that imploded in 2008.

Bankia, an amalgam of seven shaky savings banks created in 2010, was at the centre of market concerns over fragile balance sheets, but analysts fear the rot goes much deeper.

http://www.france24.com/en/20120509-spain-takes-state-control-fourth-biggest-bank-bankia