The banks that were worse than Bankia in this financial crisis

Among the citizenry has installed the belief that Bankia has been the worst bank in the financial crisis. And it is true, but only in part. Bankia is the one th

The banks that were worse than Bankia in this financial crisis

Among the citizenry has installed the belief that Bankia has been the worst bank in the financial crisis. And it is true, but only in part. Bankia is the one that more money was needed to prevent its failure, 22.424 million citizens, but in proportion to its size, there were other entities that needed injections much larger, as the Bank of Valencia (which was a subsidiary of Bankia) and Caja de Ahorros del Mediterráneo (CAM).

To get the complete list of required more relief that Bankia should be to add five entities: Catalunya Banc (CX), Caja Castilla La Mancha (CCM), Novagalicia Bank (NCG), Unnim (the former Caixa Manlleu, Caixa Sabadell and Caixa Terrassa) and CajaSur (which was in the hands of the cathedral chapter of Córdoba).

The FROB, which acted as a bailout fund and has now been relabelled Resolution Authority Executive, has served 10 years of life and with this reason, at the end of last December, the commission presented a comprehensive report on its activity which highlights the hole left by these bodies of zombies that much damage caused to the Spanish economy.

Aid granted to the banking

FROB, FGD and supports to Sareb

Amount per entity

Million euros

22.424

BFA-Bankia

CB

12.599

CAM

12.474

9.404

NCG

B. Valencia

6.103

CCM

4.215

aforesaid 2,192

Sareb

1.997

Unnim

1,645 kms

BMN

Ceiss

1.559

CajaSur

1.192

B. Civics

977

Box3

407

245

B. Gallego

Liberbank

124

Percentage of total assets

%

25,9

B. Valencia

CAM

CB

CCM

NCG

Unnim

CajaSur

BFA-Bankia

B. Gallego

Ceiss

BMN

Box3

B. Civics

Liberbank

18,5

16,6

16,2

14,1

10,2

7,7

7,5

5,4

3,4

2,4

2,0

1,4

0,2

Percentage of Weighted Assets

Risks

%

37

B. Valencia

CAM

CB

CCM

NCG

Unnim

BFA-Bankia

CajaSur

B. Gallego

Ceiss

BMN

Box3

B. Civics

Liberbank

29,6

25,9

24

18,2

17,2

12,3

11,3

The information of Total Assets and Assets Weighted by Risk refers to 31-12-2010, with the exception of the data Bank CAM and Liberbank which uses information from 31-12-2011.

7,8

6,2

4,1

3

2,1

0,4

FROB has managed processes of entities in the banking system that accounted for 38.3% of the total deposits covered:

Amounts of the credit institutions restructured

357.756 million euros

Amounts of the credit institutions of the sector excluding restructured

576.504 million euros

Source: The bank of Spain.

THE COUNTRY

Aid granted to the banking

FROB, FGD and supports to Sareb

Amount per entity

Million euros

22.424

BFA-Bankia

CB

12.599

CAM

12.474

9.404

NCG

B. Valencia

6.103

CCM

4.215

aforesaid 2,192

Sareb

1.997

Unnim

1,645 kms

BMN

Ceiss

1.559

CajaSur

1.192

B. Civics

977

Box3

407

245

B. Gallego

Liberbank

124

Percentage of total assets

%

25,9

B. Valencia

CAM

CB

CCM

NCG

Unnim

CajaSur

BFA-Bankia

B. Gallego

Ceiss

BMN

Box3

B. Civics

Liberbank

18,5

16,6

16,2

14,1

10,2

7,7

7,5

5,4

3,4

2,4

2,0

1,4

0,2

Percentage of Assets Weighted by Risk

%

37

B. Valencia

CAM

CB

CCM

NCG

Unnim

BFA-Bankia

CajaSur

B. Gallego

Ceiss

BMN

Box3

B. Civics

Liberbank

29,6

25,9

24

18,2

17,2

12,3

11,3

The information of Total Assets and Assets Weighted by Risk refers to 31-12-2010, with the exception of the data Bank CAM and Liberbank which uses information from 31-12-2011.

7,8

6,2

4,1

3

2,1

0,4

FROB has managed processes of entities in the banking system that accounted for 38.3% of the total deposits covered:

Amounts of the credit institutions restructured

357.756 million euros

Amounts of the credit institutions of the sector excluding restructured

576.504 million euros

Source: The bank of Spain.

THE COUNTRY

Aid granted to the banking

FROB, FGD and supports to Sareb

Amount per entity

Percentage of

total assets

Percentage of Assets

Weighted Risks

Million euros

%

%

22.424

25,9

37

BFA-Bankia

B. Valencia

CAM

CB

CCM

NCG

Unnim

CajaSur

BFA-Bankia

B. Gallego

Ceiss

BMN

Box3

B. Civics

Liberbank

B. Valencia

CAM

CB

CCM

NCG

Unnim

BFA-Bankia

CajaSur

B. Gallego

Ceiss

BMN

Box3

B. Civics

Liberbank

CB

12.599

18,5

29,6

12.474

16,6

25,9

CAM

9.404

16,2

24

NCG

B. Valencia

6.103

14,1

18,2

CCM

4.215

10,2

17,2

Aforesaid 2,192

Sareb

7,7

12,3

1.997

Unnim

7,5

11,3

1,645 kms

5,4

7,8

BMN

Ceiss

1.559

3,4

6,2

1.192

2,4

4,1

CajaSur

B. Civics

977

2,0

3

Box3

407

1,4

2,1

245

0,2

0,4

B. Gallego

124

Liberbank

The information of Total Assets and Assets Weighted by Risk refers to 31-12-2010, with the exception of the data Bank CAM and Liberbank which uses information from 31-12-2011.

FROB has managed processes of entities in the banking system

they accounted for 38.3% of the total deposits covered:

Amounts of the credit institutions of the sector

excluding restructured

576.504 million euros

Amounts of the credit institutions restructured

357.756 million euros

Source: Bank of Spain.

THE COUNTRY

These banks will go down in history for having the worst managers in banking, taking advantage of the insufficient and inadequate supervision from the Bank of Spain, sank their entities in the last financial crisis. Some of the managers of these entities have been justified by saying that the real estate bubble burst in the places of origin of their banks, but what is true is that others also had this problem and did not go bankrupt.

MORE INFORMATION

The National Audience to process the excúpula of Banco de Valencia by false accounting The Supreme court acquits two exdirectivos of the CAM and downgrade the penalty to other two

“When we compare the public aid granted to banks or boxes rescued with his size, ‘the worst of the worst’ was not the rescue of the CAM, as stated by the former governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, but the Bank of Valencia,” recalls Joaquín Maudos, professor of Economic Analysis of the University of Valencia.

Guilty, bad managers

In the opinion of this expert, the common denominator of the boxes in proportion, has been a difficult rescue by the pocket of the taxpayer “is the high exposure to the brick (construction and real estate promotion), which implies a bad management to ignore the risk that is assumed by concentrating an excessive investment in a single sector of activity. This lack of diligence in the management is what we strived to Spain to request a bailout, certainly not to the whole economy, but to its banking sector”.

And it adds that the magnitude of the banking crisis in Spain “is a combination of many factors, but the most important is the mismanagement of the receivership entities. And it is not a trait that applies to the box model of savings, because it has been surpassed with success the brutal crisis”. Other factors, points Maudos, are “gaps in the regulation (especially in terms of capital and provisions, which were insufficient) and in the oversight; it was apparent when surfaced unrecognized losses masked in refinanced loans or when the bank approved a stress test and then had that intervenirlo”.

Refinance with bad arts, that is to say, to clients without a future, was one of the tricks used to disguise the pérdidas that, with time, they became gigantic. Statistics show surprising data: the Bank of Valencia, which was under the presidency of Jose Luis Olivas (who was also vice-president of Bankia) needed aid for 25.9% of their total balance, and for 37% of all the risks assumed. This means that one of every three loans was unrecoverable and had no sufficient capital to cover the hole.

This entity even came to grant mortgages without taxing the floors, something that was against the rules. The November 21, 2011, a day after the PP won the elections, the Bank of Spain agreed to the replacement of the directors and managers. From the Government of Rajoy accused the supervisor to pierce a problem which was of the Executive socialist. In total, taxpayers were placed on the Bank of Valencia 6.103 million and only recovered 42. The 27 of November of 2012 it was sold to CaixaBank for one euro.

The FROB has tried to that the damage of the Bank of Valencia will not remain without response, and has been appearing as aggrieved in 11 legal proceedings in the courts of the National court to recover the amounts for the resolution process of the entity”.

The second place in the ranking of the worst banks is to the CAM, which was sold to Sabadell on the 7 November 2011 for a euro. 29.6% of the credits, framed in the risk-weighted assets, were delinquent uncollectible. In this case there were the taxpayers who paid the bill but the Deposit Guarantee Fund (DGF), that is to say, the customers of the banks. The FGD assumed the losses of CAM in capital and, in addition, 80% of the deadbeats that are out finding the Sabadell. According to the figures, still provisional, the bill will result in 7.386 million, 693 million more than anticipated by the Fund.

Catalunya Banc, goodbye 12,600 million

Catalunya Banc, which was one of the larger entities, it also had a hole sidereal: needed 12.599 million and have recovered 881 million, paid mostly by the buyer, the BBVA. The bill amounted to 11.718 million that has been added to the gigantic public debt.

The first entity that went out of business was CCM, in march of 2009. Only this entity ended up with the assets of the guarantee funds that banks, savings banks and co-operatives had built up over two decades. The company was famous for its acquisitions meaningless projects and dilapidated, among which highlighted the airport of Ciudad Real. Remained in the hands of Liberbank, which has litigated in order to avoid some pending payments, but has cost the industry $ 2.475 million, the lack of close your file.

Novagalicia Bank had a decline of 18.2% on the loans granted and demanded an injection of 9.404 billion, of which only recovered 873 million subscribers by Abanca, its current owner.

The crisis of the Catalan Unnim also ran for the account of the Guarantee Fund, which values its cost provisional in a few 1.997 billion, a figure that far exceeds 155 million the estimates. 10.2% of their assets in risk results failed.

The seventh entity worst managed was CajaSur acquired by Kutxabank. 12.3% of their loans were uncollectible and therefore the State had to inject 1.192 million, of that your buyer paid 803. A total of 389 million have been added to the debt no one is responsible for it.

“To June 2019, the FROB was appearing in a total of 24 criminal proceedings that are ongoing against numerous former officers of various entities” and rescued them claim 3.705 million. At least, that not all of it goes unpunished.

43.225 million lost, according to the present calculations

The balance sheet recently published by the FROB is summarized by saying that the State has invested in the financial sector 56.545 million between capital and hybrid products, and 2.326 million in guarantees. Up to the moment, and this is an account that will be changing in the coming quarters, have been recovered only 5.917 million, that is to say, a 10% of the total of public money contributed.

The entities that have contributed most to the recovery of some aid Banca Cívica, with 1.142 million; Ceiss, (former Caja España/Duero) with 926 million; and Catalunya Caixa with 881 million. According to this calculation, the State would lose 50.626 million. But lack Bankia, the jewel in the crown. The document of the FROB points out that expected to retrieve other 9.729 million with the BFA-Bankia and Sareb. If it meets this forecast, in total, the FROB would lose 43.225 million, and recover the 26% of the share capital according to the most optimistic forecasts, although everything will depend on “developments in the investee companies,” says the Fund.

what Has compensated for this terrible damage to the public purse and society? That is the most difficult question to answer. However, the FROB provides a data unpublished very relevant: was rescued banks that had 357.756 million in deposits covered by the Deposit Guarantee Fund, a body that would not have been able to fulfill its function so that the State would have gone to the rescue of the depositors, adding about 35 more points to the public debt, a figure untenable.

Updated Date: 12 January 2020, 11:00

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