Spain not planning to sell more Bankia shares in short term

MADRID Thu May 29, 2014 8:48am EDT

MADRID (Reuters) - Spain is not planning to sell more of its controlling stake in bailed-out lender Bankia in the short term, Deputy Economy Minister Fernando Jimenez Latorre said on Thursday.

Online newspaper El Confidencial said earlier on Thursday that Spain's bank restructuring fund FROB was set to sell another 11 percent stake as early as Friday. The FROB said the report was "completely untrue."

"There is not going to be any placement in the short term," Jimenez told a news conference.

The Spanish government sold a 7.5 percent chunk of Bankia in February, kicking off the privatization process and turning the bank into a symbol of the country's economic recovery.

The FROB, which manages the government's bank holdings, can start selling shares in Bankia again after Friday, when a restrictive period following its first placement expires.

Shares in the lender, which is currently 61 percent-owned by the state, were down 1.9 percent at 1200 GMT on Thursday, at 1.47 euros per share.

Bankia, crippled by Spain's property market slump, embarked on drastic turnaround involving thousands of job cuts and office closures since its bail-out.

It returned to profit last year, after losing 19 billion euros ($25.8 billion) in 2012, when its problems pushed Spain to ask Europe for funds to rescue weak banks.

Spain turned a small profit with the first share placement, completed at 1.51 euros per share, above the 1.35 euros per share at which it had injected funds into Bankia.

(Reporting by Sarah White and Robert Hetz; Editing by Julien Toyer and Erica Billingham)