El presidente de Bankia, Jos?e Ignacio Goirigolzarri, en una conferencia en la sede madrile?a del banco nacionalizado el s?bado, 26 de mayo del 2012. Bankia le ha costado al erario espa?ol 30.500 millones de d?lares, pero Goirigolzarr sostienen que no necesitar? m?s. (Foto AP/Antonio Heredia)
El presidente de Bankia, Jos?e Ignacio Goirigolzarri, en una conferencia en la sede madrile?a del banco nacionalizado el s?bado, 26 de mayo del 2012. Bankia le ha costado al erario espa?ol 30.500 millones de d?lares, pero Goirigolzarr sostienen que no necesitar? m?s. (Foto AP/Antonio Heredia)
Bankia's president, Jose Ignacio Goirigolzarri, speaks during a press conference at the bank's headquarters , in Madrid, Saturday, May 26, 2012. Spain's troubled bank, Bankia, has asked the Spanish government for 19 billion euro ($23.8 billion) in financial support just as a leading credit rating agency downgraded it to junk status. The request came as Standard & Poor's downgraded Bankia and four other Spanish banks to junk status because of uncertainty over restructuring and recapitalization plans. (AP Photo/Antonio Heredia)
MADRID (AP) ? Troubled Spanish lender Bankia will treat the ?23.5 billion ($29.5 billion) in state aid it will receive in the country's biggest-ever bank bailout as an investment meant to make a profit for the Spanish government and not as a loan, its president said Sunday.
Jose Ignacio Goirigolzarri appeared to be trying to reassure markets after the Spanish media questioned what he had meant by saying a day earlier: "We don't need to talk about giving any of it back."
In a statement Sunday, he said Bankia's obligation is "not to return that capital but to be able to generate value and profitability for that contribution."
Goirigolzarri said the Spanish state would decide "when it deems appropriate, and through the mechanism it chooses," when to sell its stake in Bankia to obtain the highest possible price to benefit taxpayers.
Bankia is stuck with ?32 billion ($40 billion) in toxic assets on its books from loans in the property sector before Spain's real estate bubble burst.
The Bank of Spain has estimated that the country's banks are sitting on some ?180 billion ($233 billion) in assets that could cause them losses.
The government fears the cost of rescuing the country's vulnerable banks could overwhelm its finances, which are already strained by a double-dip recession and an unemployment rate of nearly 25 percent, and force it to seek a rescue by the rest of Europe ? already preoccupied by crisis-hit Greece.
Currently the government is enduring high interest rates on Spain's benchmark 10-year bond, which was at 6.29 percent Friday. Anything above 7 percent is considered unsustainable in the long run.
A few weeks ago, the conservative government of Prime Minister Mariano Rajoy was maintaining it felt confident there would be no need to inject more public money into Spanish banks.
Even at this month's NATO summit in Chicago, Rajoy dismissed comments from the new French President Francois Hollande that Spain's banks might need money from European recapitalization funds to stay in business.
Now the Spanish government is under pressure to ensure that the country's second-largest mortgage lender has enough capital to go forward and hopes this capital injection will calm markets that made Bankia shares experience turbulent trading recently.
Some analysts have been reassured by the recapitalization plans Goirigolzarri set out at his news conference Saturday.
"Bankia ceases to be a concern; now the accounts are very clear and its capital requirements are very clear," said analyst Manuel Escudero of the Deusto Business School.
So far, the Bank of Spain has agreed to inject Bankia with ?4.5 billion ($5.7 billion) in rescue funds in June. This will be followed in July by ?19 billion in state recapitalization, Goirigolzarri said.
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