June 25, 2013 5:31 pm

Bankia faces 145,000 mis-selling claims

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Bankia is facing claims from almost 145,000 retail investors who allege they were mis-sold hybrid instruments as protesters descended on the bailed-out Spanish lender’s annual meeting in Valencia.

José Ignacio Goirigolzarri, Bankia chairman, confirmed that 144,903 claims had been made against the bank, which last year requested the largest bank rescue in Spanish history, with 45,000 of these having been addressed by an independent arbitration process. Of those, 179 customers have had their money returned, Bankia said.

Regular protests have been staged outside branches of Bankia, formed in 2010 in a merger of seven regional savings banks, by small investors in its preference shares and subordinated debt – transforming a project hailed at the time by the Spanish government as the solution to its banking troubles into the enduring symbol of the country’s economic crisis.

Those who invested in the hybrid financial instruments – the majority the savings bank’s own clients – incurred heavy losses after European authorities ruled they must share the burden of the lender’s recapitalisation.

Several protesters attempted to break into Tuesday’s meeting, Spanish media reported, as Mr Goirigolzarri, who took charge of the lender after its rescue, explained to shareholders that he did not believe Bankia needed any more capital. He said he remained confident it could achieve a net profit of €800m for this year. Last year its €19bn net loss was the largest in Spanish history.

The Bankia executive chairman, who replaced Rodrigo Rato, former International Monetary Fund managing director, at the helm of the bank last May, said he expected that “practically all” of the arbitration claims against Bankia would be resolved by the last quarter of this year.

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