Bankia to Win EU Bailout Approval by End-November, Almunia Says
Bankia and three other Spanish lenders will win European Union approval for government bailouts by the end of November, EU Competition Commissioner Joaquin Almunia said.
“The Bank of Spain, the Commission and the management of the four entities have been working on their restructuring plans during the summer, and the commission will take a decision approving them by the end of November,” Almunia said in the text of a speech he gave in Barcelona today.
Restructuring plans for Spanish banks that received help may need to make balance-sheet reductions and accept bans on acquisitions or price leadership, Almunia said prepared remarks for a speech in Barcelona today. The balance sheet reductions may be caused by the transfer of impaired assets to Spain’s bad bank, called SAREB, he said.
Banco de Valencia SA (BVA), Novo Caixa Galicia Banco and Grupo Caixa Catalunya will also win EU authorization for the aid, he said.
Banks that receive government support require EU approval for the aid and must draw up restructuring plans that may require them to sell units or accept curbs on their business to compensate for the advantage the state aid gives them over rivals.
According to Spanish plans, “the whole Spanish financial system will be fully capitalized by mid-2013 at the latest,” Almunia said.
Banco Popular Espanol SA is among banks that have to present recapitalization plans by the end of October, Almunia said, and they can seek government funding if they aren’t able to obtain private capital by the end of June 2013.
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