Spanish bank CAM has up to 17-bn-euro losses: executive
Struggling Spanish savings bank Caja Mediterraneo has losses of up to 17 billion euros ($22 billion) weighing on its books, much more than first thought, the bank that bought it said on Wednesday,
Banco Sabadell, which bought the savings bank, known as CAM, under the Bank of Spain's clean-up of the country's struggling financial sector, revised the losses up dramatically from the 5.5 billion euros earlier estimated.
Sabadell executive director Jaime Guardiola told reporters the bank's losses could be "closer to 17 billion euros than 5.5 billion."
The central bank took charge of the bank in July as part of Spain's efforts to clean up a financial sector still reeling from the bursting of a real estate bubble in 2008.
This month the central bank offloaded the Caja, selling it to a public bank deposit guarantee fund which then sold it on to Banco Sabadell for a symbolic one euro.
Other potential bidders for the ailing savings bank withdrew from the contest after studying CAM's books.
The CAM was one of five Spanish banks that failed European stress tests on July 15 to see if they could survive a major crisis.
It is based in the eastern coastal region of Alicante which was one of the worst hit by the bursting of the property bubble and the subsequent downturn in the economy made worse as the government adopted tough austerity measures in an effort to stabilise the public finances.
© 2011 AFP