* Aims to make dividend payments in 2015
* Would be bank's first payouts, after record rescue
* Small investors protest at shareholder meeting
* Rescued lender still trying to mend image in Spain
(Adds reaction, background on lawsuits)
By Jesús Aguado
VALENCIA, Spain, March 21 Spain's bailed-out
Bankia aims to pay a dividend next year, allowing the
state to recoup more of the billions of euros taxpayers poured
into the bank and helping to compensate thousands of small
investors who lost money.
Once a symbol of Spain's financial crisis, Bankia has
evolved into a sign of the country's economic recovery after it
returned to profit in 2013 and the government began selling its
majority stake, turning a small profit.
But the bank still draws anger from small investors, who
believe they were mis-sold complex savings products that became
Bankia shares when the bank was rescued in the country's biggest
About one hundred of them demanded compensation outside the
bank's annual shareholder meeting on Friday in Valencia, where
it has its headquarters. They heckled Bankia's Chairman Jose
Ignacio Goirigolzarri as he told the meeting the bank aimed to
paying a dividend in 2015.
This would be the earliest Bankia could make a payout to
shareholders under the terms of its rescue. The dividend would
be taken against 2014 profits, and submitted for shareholders'
approval at next year's annual meeting.
"I can assure you that the board and the whole Bankia team
is working with all the effort and commitment needed to make
this dividend payout possible," Goirigolzarri, who took over
when the bank was rescued in mid-2012, said.
"It would be a way to reward our shareholders' faithfulness,
and it would also be an additional means of returning aid to
Spanish taxpayers," he said.
Created via the merger of seven savings banks in 2010,
Bankia was crippled by soured property investments and rescued
less than a year after joining Madrid's stock exchange. I
Now 60.1 percent government-owned, it took 22.5 billion
euros ($31 billion) in state aid altogether and has never paid a
The government sold a 7.5 percent stake last month,
attracting big name investors such as billionaire financier
George Soros. International funds now own more than 19 percent
of the bank's capital, up from under 4 percent last May.
When the bank was rescued about 285,000 people, including
many pensioners, held Bankia preference shares and subordinated
debt which had to be exchanged into shares at discounts after
Bankia had to accept a 41.3 billion euro rescue from Europe.
Consumer group ADICAE, which represents many investors
involved in that exchange, said dismissed Bankia's talk of
dividends next year and called for the bank's management to
focus on investigating and making up for past errors.
Bankia, which has been cutting branches and jobs, turned a
512 million euro profit in 2013 after a 19.2 billion euro loss
the year before.
But it is still battling to mend its image at home, where
several past managers are embroiled in court investigations.
Many ordinary Spaniards also lost money after they bought
into Bankia's stock market listing in 2011, a transaction that
is being probed by Spain's High Court.
ADICAE said earlier this week that a Madrid court had
accepted a class action lawsuit, grouping complaints from 3,200
families over the alleged mis-selling of hybrid debt such as the
preference shares, a cross between debt and stocks.
Some investors will get their money back through an
arbitration process handled by consultancy KPMG, and so far
137,476 clients have been successful, equivalent to about 1
billion euros worth of investments that have to be returned.
Others may get their money back as Bankia's share price
rises. Bankia estimated that about 42 percent of former
preference shareholders were now breaking even, but some
protestors at the meeting said that wasn't good enough.
"It's true that the share price has started to rise and now
I might recover about half my investment, but I don't want to
wait anymore, I don't want to be a shareholder against my will,"
said Isabel Gallego, a 54-year-old auxiliary geriatric nurse who
invested 60,000 euros in preference shares sold by some of the
entities that merged into Bankia.
She said she had been denied the right to participate in the
arbitration and was told she didn't have the right documents.
Bankia shares were down 0.4 percent at 1.51 euros at 1527
GMT on Friday, more than double the level compared with last
year's shareholder meeting in June.
($1 = 0.7189 euros)
(Writing by Sarah White; Editing by Jane Merriman and Erica