Spain banks: Bankia seeks 19 billion euro bailout as Standard & Poor’s cuts its rating to junk status

Troubled Spanish lender Bankia has asked Madrid for an additional injection of 19 billion euros ($24 billion), which would be the largest bank bailout in the country’s history, the Wall Street Journal reported today.

According to the Associated Press, the board of Spain’s fourth-largest bank formally approved the request at a meeting today.

Bankia, whose shares were suspended from trading earlier today, also restated its 2011 results, the BBC said. The stricken lender made a 2.98 billion euro loss last year rather than the 309 million euros in profit it announced in February.

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In another blow to the debt-laden lender, ratings agency Standard & Poor’s downgraded Bankia and four other Spanish banks to junk status, Reuters reported.

The move came about a week after Moody’s cut the ratings of 16 Spanish lenders due to the embattled country’s weak economy and Madrid’s reduced ability to support the banks.

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Bankia received 4.5 billion euros in government funds earlier this month, in a move that partially nationalized the bank and caused its share price to plunge.

Spanish finance minister Luis de Guindos said Wednesday more state money would be made available — if needed — to shore up Bankia, according to the Telegraph.

Bankia was created in 2010 as a conglomerate of seven regional savings banks, which were struggling financially. It has 32 billion euros in toxic property assets following the collapse of the country's real estate bubble.