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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was part-nationalised last week, plunged by more than a quarter on Thursday morning, after a report that customers had withdrawn €1bn from the bank over the past week.
Shares fell 27 per cent in morning trade to €1.21 in an initial reactio to reports in El Mundo, a national Spanish newspaper, that customers had withdrawn the sum, citing information from a recent board meeting.
Spain’s stock market regulator has placed shares “under auction”, a process used to allow market participants to better cope with heavy trading volumes.
The self-styled “the leader of the new banks” was formed from seven cajas last year and has now shed nearly 70 per cent of its market capitalisation since its shares were listed in July of last year.
Last week the Bank of Spain announced banking sector reforms for the fourth time, requiring banks to set aside an extra €30bn of capital to provision against bad property loans.
Concerns about the sector’s exposure to about €180bn of bad loans have deepened, and Spanish banks have seen heavy selling over the past week.
On Thursday morning shares in Banco Popular tumbled 7.1 per cent to €1.86, while Bankinter fell 5 per cent to €2.94. Caixabank, Spain’s biggest domestic retail lender by number of customers, fell 3.8 per cent to €2.19.
Bigger banks with less exposure to the domestic market were swept up in the selling. Santander, Europe’s biggest bank by assets, fell 2.8 per cent to €4.39, while BBVA slipped 2.8 per cent to €4.77.
Volatility among lending stocks helped to drive the broader IBEX 35 index down 1.6 per cent to 6,507.30.
Lenders across Europe fell, with the FTSE Eurofirst banking sub-index sliding 2.3 per cent to a new year-low of 342.09.
Bankia hit by report of withdrawals - FT.com
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