* Annual general meeting starts at 1000 GMT
* Thousands of investors to protest after losses
* Bankia to reaffirm profit target despite tough environment
By Jesús Aguado
MADRID, June 25 (Reuters) - Thousands of ordinary investors who lost money when Spain's Bankia had to be bailed out barely a year after its stock market listing intend to protest at the lender's annual general meeting on Tuesday.
Shareholder activist groups have hired buses to the meeting in Valencia, in eastern Spain, and have berated Bankia executives for failing to book a larger venue.
The government had pitched Bankia's public offering as the solution to Spain's banking ills when it was listed in 2011.
But hundreds of thousands of small investors lost their money when near-collapse forced Spain to seek European funds to rescue its banking system. Bankia received 18 billion euros ($24 billion) of the 42 billion euros in May.
Another 300,000 people who bought complex financial products marketed by Bankia are still trying to calculate how much they lost.
The hybrid debt and preference shares they bought between 2007 and 2010, before Bankia was created from the merger of seven former savings banks, were swapped last month for ordinary shares at an average discount of 38 percent in an attempt to help them recoup some of their losses.
But these new shares have since tumbled by more than 50 percent and some analysts believe they could fall another 25 percent from the 0.59 euros per share they were trading at on Monday.
Many of the investors are suspicious of an arbitration process that the government set up to help some of them get their money back if they can prove the bank did not properly explain the risk to them.
"Now that we've been made forced shareholders after the debt swap, we want to defend the right of people with a limited financial culture who didn't know what they were sold," said Roberto Serrano Luch, chairman of ADA Bankia, a group of shareholders created earlier this year.
While Bankia has sold assets, closed branches and returned profit in the first quarter, Spain's banks are still struggling in an economy weighed down by debts from a long-bust housing boom and by government cost-cutting.
Bankia may have to set aide more money to cover potential risks on its refinanced and restructured loans after the Bank of Spain published new, tougher rules on how banks should account for these portfolios in April.
However, Bankia Chairman Jose Ignacio Goirigolzarri is widely expected to reaffirm the bank's annual profit target of 800 million euros at the meeting, sources close to the lender said. ($1 = 0.7637 euros) (Writing by Julien Toyer; Editing by Fiona Ortiz/Ruth Pitchford)