Rato Says Bankia Overstating Losses, Rescue ‘Brutal,’ Mundo Says

June 2 (Bloomberg) -- Bankia SA former Chairman Rodrigo Rato said the new head of Spain’s third-biggest lender overstated losses at the institution while requesting a “brutal” recapitalization by the state, El Mundo reported.

Rato said his successor, Jose Ignacio Goirigolzarri, presented possible future losses as real losses when requesting state aid that causes serious damage to the interests of shareholders, taxpayers and the Spanish banking industry, the newspaper reported, citing a three-page memo Rato circulated among board members of Bankia’s Caja Madrid unit.

To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net