May.28 - Shares in state-owned Spanish lender Bankia tumbled after billions of new shares flooded the market as part of a multi-billion euro cash injection. As Sonia Legg reports there's little hope of a quick recovery.
A 75% loss on their investment - that's what's brought these Bankia shareholders onto the streets of Madrid. (SOUNDBITE) (Spanish) FLORIAN MOTA, A 72 YEAR-OLD SAVER WHO INVESTED 40,000 EURO IN PREFERENCE SHARES, SAYING: "The guy at the bank we trusted all our lives told us to invest. I even cashed in my pension plan to invest. Now they have my pension and my wife's, we have nothing." (SOUNDBITE) (Spanish) ELVIRA PEREZ, A 76 YEAR-OLD WOMAN WHO INVESTED 18,000 EURO IN PREFERENCE SHARES, SAYING: "I ran around Madrid working like a dog, so these pigs, these thieves, could tell me there is no money and no credit. I trusted my life savings to the bank. All I have left is my husband's pension." The state-owned Spanish lender issued more than 11 billion shares as part of 15 and a half billion euro recapitalisation It was meant to be a new beginning after Bankia received a 24 billion euro bailout last year. Instead the shares initially fell 20% - hitting an all time low. Last week the stock lost 50% of its value when institutional shareholders got their chance to sell. Olivetree's Simon Maughan says the bank is in a precarious position. (SOUNDBITE) (English): SIMON MAUGHAN, BANKING ANALYST, OLIVETREE, SAYING: "Bankia is not out of the woods yet and there are a number of people out there with short positions on the stock betting that it is worth very little indeed." The Spanish lender is two-thirds owned by the state - small savers own a large proportion of the rest. Many are angry they were encouraged to invest, and were unaware the bank had financial problems largely caused by a property crash. (SOUNDBITE) (English): SIMON MAUGHAN, BANKING ANALYST, OLIVETREE, SAYING: "It is not a true reflection of the average bank in Spain. The businesses that became Bankia - the caixa in Madrid - had a lot of very concentrated real estate lending which has proved to be extremely poor quality and therefore although it is a concentrated view on the problems in Spain it is more extreme what is going on at Bankia than what is happening at the other listed banks." Bankia's Chairman remains positive - he believes the share price will eventually settle at around 75 cents in line with its Spanish peers. But analysts predict a figure closer to 50 cents. Bankia still has to implement a restructuring plan and the Spanish economy is showing no signs of revival