Spanish bank seeking €19bn bailout

The board of directors of the troubled Spanish bank, Bankia, says it has agreed to ask for €19 billion in state funds.

In a statement, the bank’s president, Jose Ignacio Goirigolzarri said that the recapitalisation has “reinforced the solvency, liquidity and solidity of the bank”.

The decision came on the same day as credit rating agency Standard & Poor’s downgraded Bankia and four other Spanish banks to junk status because of uncertainty over restructuring and recapitalisation plans.

Trading in Bankia shares were suspended today while its board determined how much new aid was needed.

The bank’s shares have been subject to upheaval in recent weeks amid fears it could succumb to the massive losses it built up in bad loans in the country’s collapsed property market.