UPDATE 1-Bankia customers pull out over 1 bln euros -report

Thu May 17, 2012 2:09am EDT

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* Over 1 bln euros taken out since nationalisation - El Mundo

* New chairman informs board of cash exit

MADRID May 17 (Reuters) - Customers of troubled Spanish bank Bankia, nationalized last week, have taken out over 1 billion euros ($1.3 billion) from their accounts over the past week, El Mundo newspaper reported on Thursday.

The newly appointed chairman, Jose Ignacio Goirigolzarri, informed a board meeting that customers had pulled out funds since the bank was taken over by the government, El Mundo said, citing information from the board meeting it had seen.

The government took over Bankia, the country's fourth largest lender, on May 9 in an attempt to dispel concerns over the bank's ability to deal with losses related to a 2008 property crash.

Uncertainty over the final cost of Spain's banking reform has stoked investor fears that an expensive international bail-out could be on the cards, putting the survival of the euro zone at stake.

Shares in Bankia slumped 10 percent on Wednesday, compounding a week of falls, as small investors who had participated in a July stock market listing sold their holdings which have lost over half their value since the flotation.

Bankia did not respond to requests on Wednesday asking if there had been mass withdrawals of cash from deposits. No-one one was available immediately to comment on Thursday.

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