Bankia Reports Return to Profit in 2013, Year after Rescue

After dragging Spain's financial sector to the brink of disaster, Bankia reported Monday a resounding return to profit in 2013 and said it had finished a painful restructuring two years early.

Bankia, saved from bankruptcy in 2012 with an injection of 18 billion euros ($24 billion) in eurozone rescue loans, reported a net profit of 509 million euros in 2013, after a catastrophic 19.2-billion-euro loss the previous year.

Spain's fourth-largest bank by market value, Bankia said it managed to boost profit even as net banking income fell by 19.7 percent to 2.567 billion euros in 2013.

It marks a dramatic turnaround for the lender, which was born in 2010 from the merger of seven troubled savings banks.

After listing on the Madrid stock exchange with fanfare in July 2011, Bankia had to be nationalized less than a year later, in May 2012, to save it from collapse as bad loans and losses spiraled.

Spain then turned to its eurozone partners for 41 billion euros in rescue loans to shore up the entire banking system.

Bankia has had to shut more than 1,000 branches and shed thousands of staff in a restructuring. In December, however, it regained its place in the IBEX-35 index of top listed companies on the Madrid stock exchange.

"These results confirm that we are meeting the commitments we announced to the market and we are ahead of the targets set in our 2012-2015 strategic plan," Bankia president Jose Ignacio Goirigolzarri said.

"We have completed the restructuring -- two years earlier than forecast -- and we have regained our commercial strength, improving productivity levels," he said in a statement.

The bank said its balance sheet had been strengthened, with the share of rock-solid core capital surging to 11.88 percent of all capital at the end of 2013 from 5.16 percent a year earlier.

But Bankia remained bogged down by risky loans extended during Spain's decade-long property boom, which imploded in 2008. Non-performing loans rose to 14.7 percent of all credits at the end of 2013 from 13.0 percent a year earlier.

The banking group as a whole, BFA-Bankia, reported a 2013 net profit of 818 million euros, after suffering a loss of 21.24 billion euros the previous year.