November 21, 2018 / 11:08 AM / a year ago

Spanish PM says Bankia not for sale for now due to market conditions

MADRID, Nov 21 (Reuters) - The Spanish government is not planning to sell or reduce its stake in Bankia for the time being due to its low share price, Prime Minister Pedro Sanchez said on Wednesday.

This reaffirmed a view expressed by other government officials on not selling the holding any further until shares have recovered, in order to be able to recover most of the public aid pumped into Bankia.

The bank got a 22.4 billion-euro ($25.5 billion) rescue package in 2012 to recover from property-loan losses at the height of Spain’s financial crisis.

The government has until the end of 2019 to sell off the 61 percent stake it holds.

“Our main objective is to recover the 22 billion euros injected into the lender,” Sanchez told lawmakers. “At the moment, the share price does not allow us to do it, therefore the government does not plan on selling its Bankia stake.”

The Spanish government sold a 7.5 percent stake in 2014 and a 7 percent stake in 2017.

Shares in Bankia have fallen 28 percent so far this year as banks in the euro zone are still under pressure due to ultra low interest rates and global uncertainties, such as Brexit and political instability in Italy. ($1 = 0.8790 euros) (Reporting by Jose Elías Rodriguez; writing by Jesús Aguado; editing by Paul Day and Ingrid Melander)

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