City National Bank’s parent company plans to sell off the Miami-based lender and other noncore assets outside of Spain, City National announced Wednesday.
City National said the planned sale is part of an agreement between the European Union and the government of Spain, which is trying to recapitalize Bankia and other institutions that have been struggling since the onset of the global financial crisis.
Bankia has a four-year window to evaluate alternatives for City National Bank.
“Because City National Bank is so well capitalized, profitable and well positioned in the marketplace, we are going to take our time to fully evaluate all of our strategic alternatives,” said City National Bank president and CEO Jorge Gonzalez. “This does not impact our ongoing strategy of profitable growth and diversification or our commitment to the markets we serve. Our focus continues to be taking excellent care of our clients and employees.”
City National operates 26 banking centers in South Florida and the Orlando area.
Bankia, the biggest Spanish bank set to receive European bailout funds, will cut about 6,000 jobs, or more than a quarter of its workforce, and Wednesday forecast a $25 billion loss for this year.
“It’s a demanding but realistic plan,” said chairman Jose Ignacio Goirigolzarri at a news conference. “Bankia is a company that with this aid is capable of recovering and we are going to fight so that it does.”
Bankia was formed from the merger of seven regional savings banks in Spain’s first attempt to clean up losses from the real estate collapse. Bankia is the biggest recipient of funds from the euro region’s rescue facility, which Spain agreed to tap in June as narrowing access to markets undermined its ability to backstop its banks.