Bankia Parent Revises 2011 "Profit" Of €41 Million to €3.3 Billion Loss

Tyler Durden's picture

It is rather amazing what one finds when a company which previously had allegedly posted a profit of €41 million, somehow becomes insolvent, needs a nationalization to avoid a full out liquidation, and gets bailed out by the state. One of the first things one finds is that the profit pitched to that particular class of gullible idiots, known as shareholders, was an outright lie. And yes, on that one very rare occasion when an auditor refuses to sign off on a bank's financials, in this case Deloitte, run far, and run fast. Instead what one finds is a massive loss. From Reuters: "BFA, the parent group of nationalized Spanish bank Bankia said on Monday it had restated its 2011 results to reflect a 3.3 billion euro loss, rather than a 41 million euro profit, following a bailout from the state. In a statement to the stock exchange regulator, BFA said the restated loss reflected a review of its loan portfolios and capital needs after a new audit and as part of the clean-up plan implemented by the government." Well, duh, something "new" better be reflected, or else the general public may just get the impression that banks are merely pulling numbers out of their glutes, that the entire balance sheet, income and cash flow statements are just a jumble of utter BS, and that keeping one's deposits in a system predicated on lies and fraud may not be the smartest thing. But no: that would imply one is inciting a bank run, and that is frowned upon by the very same government which does everything in its power to facilitate just the data manipulation that magically results in a profitable bank being on the verge of liquidation.

But that's not all. According to Spain's Expansion, the total loss could be far worse, more than double the just reported, to a total of €7 billion. Google translated:

Following a meeting of more than four hours, the board of directors of the entity on Monday approved the restated financial statements. Bankia matrix provided only consolidated data for the year 2011, yielding a loss of 3.318 million euros. However, individual losses would amount to 7,000 million BFA, according to financial sources.


The consolidated balance sheet losses gave the fruit of Bankia own numbers, which on Friday announced that it obtained a negative result of 2.979 million in 2011. In previous accounts, unaudited, BFA had lost 439 million in individual accounts, while recognized in consolidated profit of 41 million.


The red numbers are mainly due to the development of fair value of the share itself has BFA Bankia (52% in December 2011).

Indicatively, the move from a profit to a €7 billion loss, in a US context, is roughly the same as if US bank holding company X were to go from being profitable to posting a nearly $100 billion loss. Overnight. But only after the FDIC was invited to backstop the firm's suddenly underwater hundreds of billions in deposits.


Luckily, there is always only one cockroach (ahem JP Morgan prop desk), and we are absolutely confident the €7 billion total loss, when officially announced will be the final one. Just as the final bailout bill of €19 billion will not be topped. Or was that €25 billion?

And nobody will need a European bailout. Ever.

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johnconnor's picture

Enron accounting as its best

THX 1178's picture

This should be a big deal, but i'm so desensitized. Won't the crash just come soon?

Colombian Gringo's picture

Another day, another bankster accounting fraud. Nothing to see here, move along.

StychoKiller's picture

Glutes FTW!! I luv this site! :>D

Bleeding Fart's picture

Amazing. These numbers are kind of unreal at this point, no? I remember talking about the Panana Canal redo project with a friend from Europe and said to him, "Oh, it's only US$ 5 billion?"

And he said, "um... that's 5 billion."

me: "yeah, one aircraft carrier, or a few stealth bombers. whatevs."

zorba THE GREEK's picture

Accounting firm for bank: " WHOOPS "

Bank spokesperson: " Just a rounding error, sorry. "

Bank customer: " I would like to withdraw all my funds, please. "

Government:" Sorry, there's a 1000 Euro limit on withdraws. "

Advice; Get your money out of banks now, buy PMs, before it's too late.

CrashisOptimistic's picture

The answer is no.  Not soon

Every entity in power is maneuvering and inventing complexity designed to buy time. That many people all focused on that one thing will indeed buy time.

There are no plans for solution.  The only plans are to buy time.  

The end will come suddenly in a way that provides the time buyers an excuse that if such and such had only not happened, they would have had time to fix things.


D-2's picture

<< There are no plans for solution.  The only plans are to buy time. >>

Brilliant choice of words.  I hope I can remember them.

neidermeyer's picture

It'll all be solved when the banksters all buy their farms in New Zealand and have a stash of PM's in the basement. The solution will be that there will no longer be anyone left who cares to pretend.

Ying-Yang's picture

And they promise to never ever do it again!

Matt's picture

Problems have solutions. What we have here is a predicament. 

jumblies's picture

Not sure if I'm desensitised or just amused at this point. I mean, if a large financial company full of financial professionals can't tell the difference between a reasonable profit and a serious loss, how bad are things in the non-financial companies not full of financial professionals? Hmm, perhaps not so bad at all.


neidermeyer's picture

Oh I used to be disgusted
And now I try to be amused.
But since their wings have got rusted,
You know, the angels wanna wear my red shoes.
But when they told me 'bout their side of the bargain,
That's when I knew that I could not refuse.
And I won't get any older, now the angels wanna wear my red shoes.


I was watching while you're dancing away.
Our love got fractured in the echo and sway.
How come everybody wants to be your

prains's picture

the couch giveth, the couch taketh away

Nachdenken's picture

Wishes are horses but the banksters ride.  And ride on.  And on..

Silver Bug's picture

And now it sounds like Greece is FINALLY going to leave the EURO?!

sharky2003's picture

If the Greeks are soo good at cheating, why can't TPTB in Greece just stuff the ballot box for the pro-bailout parties and declare victory?

macholatte's picture



Greece Pours $22.6 Billion Into Four Biggest Banks



stocktivity's picture

Futures are up...rally on!  It's all Bullshit!

Whoa Dammit's picture

Not behind the times at all--this is new (tonite) and identifies the guy who was eating face, (and gives quite a bit of background on him) You would have seen this if you had opened the link.

LongSoupLine's picture

Well now...this should certainly ramp futures. Bullish!

Buck Johnson's picture

Soon, very soon we will see an Enron event.

max2205's picture

Rule 1: when the shit hits the fan, write off anything and everything that smells or is going to smell soon.


WhiteNight123129's picture

Off topic, Russell Napier is detailing how to currency crisis would come in the US.

Check out "Ubber-bear see value in Europe", he discusses how the Treasuries market would freeze.

So either default or monetizing to the roof.




StavropolJames's picture

There's an old golfing joke that goes like this.  Two guys finish a par three and one guy reports his score as a 4.  The other guys says, "4?? You took 3 shots in the sand trap alone!"  The first guys then says, "Oh, yah.  Give me an 11." 

How is this Bankia report any diffrent than the golfing joke?

Shouldn't we at least start to smile or maybe snicker at financial reports right off the bat instead of waiting for the punch line?

Conman's picture

And when spanish debt blows out even more the EuroPeoples will be on the hook sicne they retardedly accepted bonds as collateral for eurocash to bail out bankia. This level of ponzi-dom is mind blowing.

knukles's picture



Don't forget the FED

They got All Fucking Sorts of European Horse Shit Collateral with the Swap Lines, etc.

wisefool's picture

Serious but niave question, would it be possible for the Fed to de-hypocate that collateral and divide it up bewteen the european owers of the Fed. Essetially buying back its shares with/to the eurotrash on its balance sheet?

Then the fed can reboot itself?

LeBalance's picture

umm its on the US books now, socialized, why in god's name would they move it? Unless they purchased something EVEN more toxic with it.



wisefool's picture

I was thinking it could be a placation move. The US sheeple are waking up. Having the fed is one thing, but when people find out its biggest shareholders are foriegn banks/families they might get even more woke up and on the wrong side of the bed. I am not being sarcastic here. probably naive, but not sarcastic.

LeBalance's picture

o m g.

what percentage are "waking up"?

what percentage are willing to take action?

what action?


game over.

Herding Cats.

Follow Ron Paul?  OMG, another puppet!

Follow the Constitution? OMG, its a Bill for DEBT.

see the line after lol.

wisefool's picture

I think it the % is over 20% and growing. the MSM is losing eyeballs in the millions. People are looking for answers to  why the economy machine is not working anymore. The us system with Ben running the printing press and timmay runing the tax code is messed up enough. Dimon being on his own oversight board at the fed has people scratching their heads. Finding out that both the fed and the IMF are predominantly funded by US IRS, and are owned by foriegn interests might get them to stop watching DWTS and MMA long enough to send their congres person an email.

If I was Ben. I'd do it. He'd be a national hero.

wee-weed up's picture

The reason why the MSM is losing eyeballs in the millions is because they adamantly refused to properly vet Barack Obama before the election in 2008 and thus saddled us with the worst president in American history. They know he is destroying the country, but they continue to protect his ineptness. The reason? Can't say anything derogatory against the first black president. It is political correctness (PC) taken to blatant and ruinous extremes.

It will destroy them... and the sooner the better!

Obama? He's self destructing very nicely on his own.

knukles's picture


The collateral is held against the swaps, not against the equity position of its shareholders.
Two entirely different premises.
And in nay case were they one and the same, it would either simply be a repayment of the swap line in exchange for the collateral or a collateral subsitution.

wisefool's picture

Thanks. I thought I'd give it a try. I mean if Legarde is going to use IMF funds on the old continent, why not let the Euroes take care of themselves with their own central bank. (Excuse for TPTB being "we can't help our own because all out capitol is tied up in the US FED")

Hulk's picture

JPM with its interest rate swaps should get even more interesting...Can you say "infinite losses" ???

LeBalance's picture

debts-tbt-bail out?

Oh! At the last second 100% of these assets was "Sold to US" thus saving certain banking system failure!

Zounds!  What foreward thinking action by the Plunge Team!

What next for the crew of the Minnow?

Freebird's picture

Which means all lucky American taxpayers are by default shareholders in this clusterfuck.

knukles's picture

We got Facebook
And you got Bankia
We been analed and
You be Wankeas

Let's call the whole thing off

Harnar's picture

Nice one! California above all (with debt and Jello Biafra).... unless you got it from "the social network" then -1 


Was Houdini a banker?

knukles's picture

He was the senior banker at Goldilocks who came upon the sure fire deal of doubling your money by folding it in half.

q99x2's picture

Once the Gov announces "bailout" the sky's the limit. The more the merrier.

Buckaroo Banzai's picture

No biggie, they left the 3 billion in their other pants. Happens to me all the time.