Seized Spanish Lender Hit by Deposit Withdrawals Last November

Banco de Valencia SA, a failed Spanish lender, witnessed a slump in deposits (BVA) last November when market regulators suspended trading in its stock ahead of its seizure by the Bank of Spain.

“This line in the balance sheet has been especially affected by the drop in client deposits that took place between the suspension of trading of the stock and the intervention in the company by the Bank of Spain,” the Valencia, Spain-based lender said in a regulatory filing yesterday. Deposits fell 8.7 percent last year, the bank said.

Spain’s central bank seized Banco de Valencia last November and placed it under the administration of the government’s bank rescue fund, which injected 1 billion euros ($1.32 billion) into the lender after the country’s property crash wrecked its balance sheet. Trading was suspended in Banco de Valencia’s shares on Nov. 21 and resumed on Nov. 24.

Banco de Valencia posted a full-year loss of 886.8 million euros compared with a 67.2 million-euro profit a year earlier, the lender said. The bank said it would need to make 823 million euros of provisions and set up a 428 million-euro capital buffer to comply with new government regulations making lenders recognize more losses on real estate on their balance sheets.

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net Sharon Smyth in Madrid at ssmyth2@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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