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The New Caixabank-Bankia Will Have to Sell Off Doubtful Loans Worth €3.8 Billion

The new banking group, whose combined doubtful loan portfolio will amount to more than 18.5 billion euros in total, will have to get rid of 20% of its assets, which will mean divesting 3.8 billion euros.

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The new bank that emerges from the integration of CaixaBank and Bankia will have to continue cleaning up its toxic assets to reach an optimal balance sheet, according to the requirements of the supervisors. The merger of the two entities will result in the creation of a portfolio of doubtful loans worth 18.5 billion euros, equivalent to more than 5% of its total balance sheet.

As such, in order to adjust this ratio below 4%, the level prior to the last economic recession and the one recommended by the European Central Bank, the Bank of Spain and the market, the new group will have to get rid of 20% of its assets. That will mean divesting at least 3.8 billion euros, according to El Economista.

Read the full article in Spanish.

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