Spain’s government is to begin the privatisation of nationalised lender Bankia by selling off 7.5 percent through its banking assistance fund FROB, according to a filing with the stock market regulator CNMV on Thursday.
Bankia is Spain’s fourth-largest bank. It was created at the end of 2010 through the merger of several regional savings banks.
Bankia became the symbol of Spain’s financial crisis when it lost 19.2 billion euros ($26 billion) in 2012 but made a profit of 608 million euros last year.
The government nationalised it in 2012, prompting Madrid to ask its eurozone partners for 41 billion euros in rescue loans to shore up the entire banking system.
Under the terms of the European Union’s 2012 bailout, the Spanish government has until 2017 to sell its 68 percent stake in Bankia.
The banks tasked with the sale are Deutsche Bank, Morgan Stanley and UBS, the latter said in a statement to the CNMV.
Bankia’s president Jose Ignacio Goirigolzarri said earlier this month the stake in the bailed-out bank would be sold in stages over two or three years.
“It would be reasonable for the privatisation process to be similar to what is being carried out with Lloyds. That is, that it be carried out in phases and take two or three years,” he said in an interview published in daily newspaper ABC.
He was referring to the British government’s sale of six percent of Lloyds bank in September, five years after the state rescue of the lender.
Earlier this month Lloyds, which is now 33-percent owned by the British taxpayer, said it was preparing for a possible second sale.
The Spanish government will first put smaller stakes in Bankia up for sale, Goirigolzarri said.
“The first stakes will be smaller than the following ones. We have to think of starting with between five and 10 percent,” he said.
After listing on the Madrid stock exchange with great fanfare in July 2011, Bankia had to be nationalised less than a year later, in May 2012, to save it from collapse as bad loans and losses spiralled.
Bankia has had to shut more than 1,000 branches and shed thousands of staff in a restructuring.