• Next government will have a valuable asset, de Guindos says
  • Bankia is a proxy for Spanish recovery story, de Guindos says

Spain plans to keep Bankia SA independent even as it will continue selling stakes in the bailed out lender, Economy Minister Luis de Guindos said.

Because Bankia’s share price now doesn’t reflect its value, the government will hold off from accelerating the sale of shares, de Guindos said in an interview with Bloomberg in Madrid. The government wants to maintain the independence of Spain’s fourth-biggest lender, with a market share approaching 10 percent, because of its importance in stimulating competition in the banking industry, he said.

Bankia, which needed 22 billion euros ($24.5 billion) of state aid, helped push Spain into seeking more than 40 billion euros of European funds in 2012 to help keep banks’ real estate-linked losses from swamping public finances. The bank’s return to profitability makes it a proxy for Spain’s own recovery story, de Guindos said.

“The price of the share does not pick up the upside potential that Bankia has, so we are not going to accelerate the disposal of Bankia,” de Guindos said.

The decision to sell more of Bankia will fall to the government that comes into power after elections slated for December, said de Guindos. “For the future, the next government has a very important asset,” he said.

Spain began the process of reducing its investment in Bankia when it sold a 7.5 percent stake in February 2014 at 1.51 euros a share to raise 1.3 billion euros.

Bankia shares traded at 1.02 euros as of 12 p.m. in Madrid on Friday, valuing the bank at about 11.8 billion euros. The bank trades at a valuation that represents about 96 percent of its tangible book value, less than the average of banks tracked by the STOXX 600 Banks Index, which trade at about 118 percent of book value.

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