Spain's Bankia offers shareholders promise of dividend next year
By Jesús Aguado
VALENCIA, Spain (Reuters) - Spain's bailed-out Bankia said on Friday it aimed to pay dividends in 2015, allowing the state to recoup more of the cash poured into the bank and help to compensate thousands of small investors who lost money when it was rescued.
Bankia has evolved from a symbol of Spain's financial crisis into an example of the country's economic recovery after it returned to profit in 2013 and the government began selling down its majority stake, turning a small profit.
But the bank still draws ire from small investors, who believe they were mis-sold complex savings products that became Bankia shares when the bank was rescued in the country's biggest-ever corporate bail-out.
About a hundred of them protested outside the bank's annual shareholder meeting on Friday in its Valencia headquarters, demanding compensation for losses.
Bankia's Chairman Jose Ignacio Goirigolzarri was heckled by shareholders as he told the meeting the bank aimed to pay dividends in 2015. This would be the earliest point Bankia could do so under the terms of its rescue. Those would be taken against 2014 profits.
"I can assure you that the board and the whole Bankia team is working with all the effort and commitment needed to make this dividend payout possible," Goirigolzarri said in a speech.
"It would be a way to reward our shareholders' faithfulness, and it would also be an additional means of returning aid to Spanish taxpayers," he said.
Created via the merger of seven savings banks in 2010, Bankia was crippled by soured property investments and rescued in mid-2012, less than a year after listing on Madrid's stock exchange. It has taken 22.5 billion euros ($31 billion) in state aid altogether and is now 60.1 percent government-owned.
The government sold a 7.5 percent stake last month and made a small profit on the sale. International funds now own over 19 percent of the bank's capital, up from under 4 percent last May, and the share offering last month attracted big name investors such as billionaire financier George Soros.
When the bank was rescued about 285,000 people, including many pensioners, held Bankia preference shares and subordinated debt which had to be exchanged into shares at discounts after Bankia took part of a 41.3 billion euro rescue from Europe.
Bankia launched an arbitration process, handled by consultancy KPMG, so the small investors, who believe they were defrauded, can try to get their savings back.
So far 137,476 clients have been successful, with payouts worth over 1 billion euros being made. The bank aims to close the arbitration process in the first half of this year.
But some complained they were still fighting for compensation.
"I want my money back and I don't want to wait any more," said Isabel Gallego, a 54-year-old auxiliary geriatric nurse at the Bankia shareholder meeting. She had invested 60,000 euros in preference shares sold by some of the entities that merged into Bankia.
She said she had been denied the right to participate in the arbitration and was told she didn't have the right documents.
"It's true that the share price has started to rise and now I might recover about half my investment, but I don't want to wait anymore, I don't want to be a shareholder against my will."
Bankia said it estimated that about 42 percent of former preference shareholders were now breaking even, and that the rest were in a position to recover more than 80 percent of their investment at current prices.
Bankia shares were down 0.9 percent at 1.5 euros per share at 1150 GMT on Friday, up around 160 percent since last year's shareholder meeting in June. It reported a 521 million euro profit for 2013, after a 19.2 billion euro loss the year before.
(Writing by Sarah White; Editing by Jane Merriman)
