MADRID (Reuters) - Spain’s Banco de Valencia, which was bought by Spain’s third-largest lender Caixabank (CABK.MC) last year, reported a loss of 3.6 billion euros ($4.9 billion) for 2012, the bank restructuring fund (FROB) said on Monday.
While Banco de Valencia is still technically held by the FROB, CaixaBank bought the smaller lender for 1 euro with the benefit of a government-funded program to protect it against future losses on assets.
A Caixabank spokesperson said the loss has not been consolidated into the larger bank’s results. CaixaBank’s profits fell nearly 80 percent in 2012, it said last week.
Banco de Valencia was gutted by the 2008 property market crash after rampant lending to real estate developers, many of which have since gone to the wall. ($1 = 0.7376 euros)
Reporting By Sarah White; Writing by Paul Day; Editing by Gerald E. McCormick