Nationalized Spanish Bank Plummets On News Of Bank Run

Worry: A ¿1billion run on recently nationalised Spanish bank Bankia has sparked further fears that the 17-nation eurozone is about to implodeBankia hit by report of withdrawals

Shares in Bankia, the Spanish bank that was part-nationalised last week, plunged by more than a quarter on Thursday morning, after a report that customers had withdrawn €1bn from the bank over the past week.

The shares fell 27 per cent in morning trade to €1.21 in an initial reaction to reports in El Mundo, a national Spanish newspaper, that customers had withdrawn the large amount, citing information from a recent board meeting.

Spain’s stock market regulator placed the shares “under auction”, a process used to allow market participants to better cope with heavy trading volumes.

The bank later issued a regulatory filing, which said the evolution of deposits in the first half of May was seasonal.

“Bankia’s depositors can be absolutely calm about the security of the savings they have in the bank,” José Ignacio Goirigolzarri, president, said yesterday to 300 executives of the bank, according to the filing.

The statement added the bank did not expect substantial changes in the deposits balance in coming days. By mid-afternoon trading, the shares had pared losses to trade 11.2 per cent lower at €1.47.


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