Shares plunge for Spanish bailed-out bank Bankia

Shares plunge for Spanish bailed-out bank Bankia

Last Updated: Thu, Dec 27, 2012 14:15 hrs

Shares of Spain's bailed-out bank Bankia have plunged 13 percent after officials with the nation's bank bailout fund revealed the nationalized institution had a negative value of €4.2 billion ($5.6 billion).

Bankia SA is saddled with toxic property investments from the Spanish building spree that imploded. It is being bailed out by the state for €18 billion ($24 billion) from a rescue fund set up by the 17 nations that use the euro.

The bank's shares tanked Thursday after Spain's Fund for Orderly Bank Restructuring revealed Wednesday night the extent of Bankia's negative value.

Bankia was formed in 2010 in a merger of seven unlisted Spanish savings banks whose heavy lending for property hurt them badly after the country's extended real estate boom collapsed in 2008.

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