Spain's Bankia to return money to small investors

Spanish lender Bankia, which was rescued by European funds, Wednesday announced it would return money to small investors.

The bank, Spain's fourth largest lender, will reimburse small investors who bought shares when Bankia began listing on the stock exchange in 2011.

In January, the Supreme Court said that Bankia had to return the money spent by two people on its shares, as according to it, Bankia's initial public offering (IPO) had "serious inaccuracies" related to the state of the bank's finances when it was launched to the stock market.

In this sense, Bankia would avoid lawsuits by thousands of investors.

"In the event they (small investors) have sold the shares, they will receive the difference between their investment and what they made from the sale. In both cases, the bank will pay compensatory interest of an annual one percent covering the period that elapsed until the refund," Bankia said.

"They will get their funds back in a period of time that we estimate to be no longer than 15 days after the claim is filed," the bank said, adding "it will save them money by avoiding the legal process, or by reducing legal processes already underway."

Bankia was the biggest bank to be rescued after the financial crisis that forced the Spanish government to ask for a sovereign bailout in 2012. Bankia received a total of 23.46 billion euros (about 26 billion U.S. dollars) of public aid from the government.

BFA-Bankia was created in 2010 as a result of a merger between Caja Madrid and other five smaller saving banks, namely Insular Canarias, Laietana, Avila, Segovia and La Rioja. Endit