• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

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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Mon, 05/28/2012 - 19:15 | 2470310 johnconnor
johnconnor's picture

Enron accounting as its best

Mon, 05/28/2012 - 19:19 | 2470322 THX 1178
THX 1178's picture

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

Mon, 05/28/2012 - 19:51 | 2470385 Colombian Gringo
Colombian Gringo's picture

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

Mon, 05/28/2012 - 23:52 | 2470767 StychoKiller
StychoKiller's picture

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

Tue, 05/29/2012 - 00:14 | 2470793 Bleeding Fart
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."

Tue, 05/29/2012 - 00:38 | 2470819 zorba THE GREEK
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.

Mon, 05/28/2012 - 20:44 | 2470472 CrashisOptimistic
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.


Mon, 05/28/2012 - 21:23 | 2470528 D-2
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.

Tue, 05/29/2012 - 06:34 | 2470989 neidermeyer
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.

Mon, 05/28/2012 - 21:26 | 2470533 Ying-Yang
Ying-Yang's picture

And they promise to never ever do it again!

Mon, 05/28/2012 - 21:35 | 2470545 Matt
Matt's picture

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

Tue, 05/29/2012 - 01:54 | 2470870 jumblies
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.


Tue, 05/29/2012 - 06:43 | 2470996 neidermeyer
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

Tue, 05/29/2012 - 02:10 | 2470876 prains
prains's picture

the couch giveth, the couch taketh away

Tue, 05/29/2012 - 04:24 | 2470934 Nachdenken
Nachdenken's picture

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

Mon, 05/28/2012 - 19:20 | 2470330 LasVegasDave
LasVegasDave's picture

Got any weed?

Mon, 05/28/2012 - 19:24 | 2470337 Silver Bug
Silver Bug's picture

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



Mon, 05/28/2012 - 20:06 | 2470409 sharky2003
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?

Mon, 05/28/2012 - 20:32 | 2470455 macholatte
macholatte's picture



Greece Pours $22.6 Billion Into Four Biggest Banks




Tue, 05/29/2012 - 04:30 | 2470936 Nachdenken
Nachdenken's picture

and Switzerland prepares for an Euro Crash. German news :  http://www.n-tv.de/wirtschaft/Schweiz-beugt-Euro-Crash-vor-article637054...

Mon, 05/28/2012 - 19:38 | 2470361 stocktivity
stocktivity's picture

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

Mon, 05/28/2012 - 21:36 | 2470547 Matt
Matt's picture

good call, but a few hours behind the times:


Mon, 05/28/2012 - 22:26 | 2470640 Whoa Dammit
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.

Mon, 05/28/2012 - 20:11 | 2470422 LongSoupLine
LongSoupLine's picture

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

Mon, 05/28/2012 - 20:24 | 2470440 Buck Johnson
Buck Johnson's picture

Soon, very soon we will see an Enron event.

Mon, 05/28/2012 - 21:38 | 2470551 max2205
max2205's picture

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


Mon, 05/28/2012 - 21:09 | 2470513 WhiteNight123129
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.




Tue, 05/29/2012 - 00:24 | 2470808 StavropolJames
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?

Mon, 05/28/2012 - 19:16 | 2470313 Conman
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.

Mon, 05/28/2012 - 19:18 | 2470320 knukles
knukles's picture



Don't forget the FED

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

Mon, 05/28/2012 - 19:22 | 2470335 wisefool
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?

Mon, 05/28/2012 - 19:35 | 2470356 LeBalance
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.



Mon, 05/28/2012 - 20:02 | 2470402 wisefool
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.

Mon, 05/28/2012 - 20:19 | 2470433 LeBalance
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.

Mon, 05/28/2012 - 20:45 | 2470474 wisefool
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.

Mon, 05/28/2012 - 23:21 | 2470711 wee-weed up
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.

Mon, 05/28/2012 - 20:53 | 2470491 knukles
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.

Mon, 05/28/2012 - 21:39 | 2470554 wisefool
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")

Mon, 05/28/2012 - 19:45 | 2470374 Hulk
Hulk's picture

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

Mon, 05/28/2012 - 20:23 | 2470439 LeBalance
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?

Mon, 05/28/2012 - 19:54 | 2470391 Freebird
Freebird's picture

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

Mon, 05/28/2012 - 19:16 | 2470314 knukles
knukles's picture

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

Let's call the whole thing off

Mon, 05/28/2012 - 19:36 | 2470358 LeBalance
LeBalance's picture

California Uber Alles!

Mon, 05/28/2012 - 22:13 | 2470621 Harnar
Harnar's picture

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

Mon, 05/28/2012 - 19:16 | 2470315 SHEEPFUKKER

Was Houdini a banker?

Mon, 05/28/2012 - 19:19 | 2470327 knukles
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.

Mon, 05/28/2012 - 19:17 | 2470316 Stoploss
Stoploss's picture


Mon, 05/28/2012 - 19:19 | 2470324 q99x2
q99x2's picture

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

Mon, 05/28/2012 - 19:19 | 2470325 Buckaroo Banzai
Buckaroo Banzai's picture

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

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