Bankia's problem is worse than we thought

From profit to loss, Bankia restated their financial result 
May 26, 2012 El País by Miguel Jiménes


Previous year(2011), Bankia stated a 305 million after-tax profit. This year, after changing the management, they discovered that should be an almost 3 billion loss!!

Yet, we are talking about the after-tax number. Since they had a loss last year, they would "earn" a tax-credit that can be carried forward. However, if we set aside such credits, the real loss of Bankia last year is 4.3 billions!

Accounting kills....!

How come the number could vary this much???
The loss is actually from different recognition treatment of "assets." Since, as previously noted, Bankia is a creation of a consolidation among different "saving and loan banks" in Spain, they are prone to the problems of real-estate bubbles. They held substantial amounts of such housing loans and related financial products that might not be able to recovered at all. The new accounting treatments require Bankia to recognized all these as loss.

Spanish court held an investigation on the such accounting irregularity in Bankia, on its ex-CEO Rodrigo Rato and other 32 officials. 

In short, European crisis is far from end, and who knows whether there would be another "Bankia" somewhere in the member states!

Bankia修正去年的財務報表, 從稅後盈餘三億五百萬歐元變為稅後損失將近三十億歐元!!! 而稅前的損失更高達43億歐元!

主要原因是因為新的會計準則必須要他們對於所持有資產的減損認列加速, 如前面提到的一些西班牙信用合作社的歷史, Bankia手上持有很多在西班牙房地產泡沫化過程中所產生的房貸以及房貸相關金融商品, 而這些不動產不管是跌價或者是已被銀行扣押. 這些價值的損失在去年就應該要被認列.

簡單來說, 歐盟的問題並還沒有結束. 如果希臘是國債問題, 那西班牙就是銀行監理出現了很大的紕漏! 短期之內, 我們看不到歐盟問題快速解決的方案.