Nomura estimates that the main listed domestic Spanish banks could require an additional 16 billion euros ($20.02 billion) and believes the government could also need to clean-up and recapitalise the nationalised banks of Banco de Valencia, Novacaixagalicia and Catalunyacaixa.
“Including other unlisted banks, the recapitalisation needs could amount to between EUR 50 to EUR 60 billion. Given the current economic & political uncertainties facing the eurozone, this could see additional pressure on Spain to consider using external funds for the bank recapitalisation.”
Nomura expects that only BBVA, Santander and Sabadell would avoid needing to strengthen capital.
“We remain negative in our outlook for Spanish banks given the potential dilution, the uncertainties around the final amount of capital needed and how this will be funded.”
“Bankia will require a EUR 12 billion recapitalisation, which we think will see the government (through BFA [Bankia’s parent company]) take a c. 91 percent stake in the company. Based on this recapitalisation and the updated numbers on Bankia, we lower our price target to EUR 0.2 per share,” it says, maintaining its “reduce” rating on the stocks.
Spain’s fourth biggest lender, Bankia, on Saturday prepared to sell stakes it holds in companies to meet European competition rules after a state rescue that has so far cost 23.5 billion euros ($29.40 billion).
($1 = 0.7992 euros)
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