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Europe's bailed out banks: Where now?

Friday, February 28 16:40:37

Spain sold part of its stake in bailed out lender Bankia today to start the process of returning the country's biggest bailed-out bank to private ownership.

Governments rescued dozens of banks during the 2007-2009 global financial crisis. Some countries, such as Switzerland and the United States, then moved quickly to sell their shareholdings. Others, including Britain and the Netherlands, have taken longer.

Here is a rundown of progress for major banks in Europe:

SPAIN

Spain has injected about 60 billion euros ($82 billion) into its financial sector since 2009, and there are doubts it will recoup that investment, which amounts to more if asset protection schemes or the government's backing for a so-called bad bank are included.

Most of the banks nationalised after 2009 were unlisted local savings banks or cajas and many have been sold on to other lenders at a loss to the state.

Bankia, Spain's fourth-biggest lender, needed 22.4 billion euros in bail-out funds from Europe and Spain's bank restructuring fund FROB. Friday's sale will cut Spain's stake to about 60 percent and sources said it could sell more this year.

BRITAIN

Britain pumped 66 billion pounds ($110 billion) into Royal Bank of Scotland and Lloyds in 2008 and 2009 and provided tens of billions more in liquidity support to the sector.

Some 45.5 billion pounds was injected into RBS, giving the state an 81 percent stake, which it still holds. It is sitting on a paper loss of 16 billion pounds as the shares were bought at an average price of 499 pence and are trading one third below that. The stake is not expected to be sold for several more years.

Britain injected 20 billion pounds into Lloyds and sold a 6 percent stake in September leaving it with 33 percent. It is expected to sell another tranche shortly, possibly next month. The taxpayer made a small profit on the sale of the first tranche, and is sitting on a paper profit of about 2 billion pounds.

Britain also nationalized Northern Rock and Bradford & Bingley, and provided funding support while a state body runs down their loan books. Northern Rock was split into two parts, and the good bank was sold to Virgin Money.

IRELAND

Ireland spent 64 billion euros saving its banks, making it, per capita, one of the costliest banking crises of all time.

Anglo Irish, at the heart of the country's banking woes, was liquidated last year as part of a deal to release Dublin from a commitment to pay off a 29 billion euro debt.

The state owns Allied Irish Banks and Permanent TSB but few expect it to recoup the near 25 billion euros it poured into them. AIB has said it hopes to attract private investment after a return to profitability this year. Permanent TSB is awaiting a ruling on a new restructuring plan sent to the European Commission in August.

Bank of Ireland is the only Irish lender to begin weaning itself off state assistance. The government's stake of 36 percent was cut by an investment by a group of North American investors in 2011 and the sale of preference shares last year, and now stands at 14 percent. Dublin has not put a timeframe of when it would like to sell the stake.

GERMANY

Germany injected 18.2 billion euros into Commerzbank , the country's second-largest bank. The government's shareholding has dropped from 25 percent to 17 percent. It is expected that the state will keep this stake until it can limit its losses, which could take years.

SWITZERLAND

Switzerland pumped 6 billion francs ($6.8 billion) into UBS in 2008 after the bank's disastrous foray into U.S. mortgage securities brought it to the brink of collapse. The government later sold the stake at a profit. UBS also offloaded about $39 billion of toxic assets to a fund managed by the Swiss central bank as part of the rescue, which the bank bought back last year.

NETHERLANDS

The Dutch government paid out nearly 40 billion euros to rescue the domestic financial sector in 2008, nationalising ABN AMRO and injecting cash into ING and SNS Reaal.

ABN AMRO's rescue cost 28 billion euros. The government plans an initial public offering in the first half of 2015, at the earliest, but is unlikely to recoup its costs.

The state nationalised SNS Reaal last year after pouring a further 10 billion euros in. The government said in August it had no concrete plans for SNS Reaal, but its banking and insurance businesses should be split and sold off separately.

ING should complete its restructuring two years ahead of schedule in 2016 and eight years after it received a 10 billion euro state bailout. ING has repaid 11.3 billion euros, including premiums and interest. That leaves 2.25 billion euros in principal and interest still to be repaid in two tranches in March and May 2015.

BELGIUM

KBC received 7 billion euros in 2008 and 2009, half from Belgium, the rest from the northern region of Flanders. It has repaid in full the money from the federal state, has repaid a first instalment to Flanders and plans to repay the balance in instalments through to 2020.

Dexia needed two bailouts. It received 6 billion euros from France, Belgium and Luxembourg in 2008, and another 5.5 billion in 2012, which left the French and Belgian states owning 94 percent. They also continue to provide tens of billions of euros more in funding support to the bank, which has sold assets and is winding down its balance sheet.

GREECE

Greece injected 25 billion euros last year to shore up its banking sector leaving the country's four largest banks, Piraeus , National Bank of Greece (NBG), Alpha and Eurobank, majority owned by a bank bailout fund, the Hellenic Financial Stability Fund (HFSF).

The fund's stakes in Piraeus, NBG and Alpha have started to fall, albeit by a very small percentage, as investors got their first chance to exercise warrants that allow them to buy more shares in the banks at a fixed price. Those shares were sold to investors by the HFSF, but the process may take several years and there is no guarantee all warrants will be exercised.

CYPRUS

Cyprus' two largest banks, Bank of Cyprus and Cyprus Popular Bank, were spared a state rescue when they imploded last year because large depositors bore the cost of their bailout.

This means Bank of Cyprus does not have to go through the state aid process and agree a restructuring plan, because it is 100 percent privately owned. The healthy parts of Cyprus Popular Bank were absorbed by Bank of Cyprus, while the unhealthy parts are being wound down.

PORTUGAL

Portugal's 78 billion euro EU/IMF bailout has a 12 billion euro recapitalisation line for banks, of which about half has been used by Millennium BCP, Banco BPI and smaller bank BANIF.

Millennium BCP, the country's largest listed bank, took 3 billion euros in 2012 in contingent convertible bonds that give the state voting rights if not repaid on time after five years. The bank expects to return to profit and repay 500 million euros this year, followed by 1 billion euros in 2015 and 1.5 billion euros in 2016.

BPI has repaid some of the 1.3 billion euros in high- interest charging bonds it took and now holds 920 million. It expects to repay 500 million euros more by the end of March.

BANIF has repaid 150 million euros out of 400 million euros in contingent capital.