Friday, August 12

The bank rescue fund loses another 1,352 million despite the increase in the value of its stake in CaixaBank

The Fund for Orderly Bank Restructuring (FROB), the state company that channeled the financial rescue, lost more than 1,300 million euros during the 2021 financial year, despite cutting the red numbers it obtained in 2020 by more than 62%. The agency points out in a press release issued this Friday, yes, that there has been a 122% increase in the valuation it gave to its stake in Bankia, today in CaixaBank after the merger closed last year.

The FROB closed 2021 with 1,352 million euros in losses compared to the 3,639 million euros it obtained in 2020, the year of the pandemic. Last year he attributed these losses to “impairment as a result of the accounting effects of the merger between Bankia and CaixaBank in the BFA Group”, an impact that continues to be maintained for last year. “This is a purely accounting impact with which all the adjustments resulting from the merger are taken into account,” says the FROB.

The organization defends that this negative result “is not a reflection of the positive evolution” that, since the announcement of the merger of CaixaBank and Bankia, the market value of the state participation in the entity has had. The FROB estimates it at 2,400 million, 122% more than it had before the agreement was announced. It should be noted that, despite the significant increase in value of this stake, there is still a long way to go to see a recovery from Bankia’s rescue, which is still around 20,000 million.

The FROB balance sheet at the end of 2021 amounts to 5,183 million euros, with a positive net worth of 2,849 million euros. At the end of 2020, FROB had a negative net worth of a total of 1,390 million euros. The FROB attributes the increase in this negative net worth to the difference in the accounting valuation it gave to the stake it had in Bankia, where it had control, than the one it has in CaixaBank. “It is also important to note that this accounting result of the FROB has no impact on the public deficit or debt,” defends the note.

During 2021, the FROB recorded a positive impact on the income statement amounting to 168 million euros, as a result of the excess provision as a result of updating the estimate of the cost of the guarantees granted by the FROB in the entity sale processes. The financial margin in 2021, as in previous years, was negative, for an amount of minus 69 million euros, since the assets on the FROB balance sheet (mainly the stake in BFA and the cash position of the FROB) did not it has generated enough income to offset the financial cost of the FROB’s liabilities, which are essentially financed by the loan received from the State. As of December 31, 2021, this loan had a balance of 1,865 million euros, after partial capitalization, prior authorization from the ESM, carried out on December 20, 2021