JP Morgan stops protecting Bankia, buys 30% then sells 12%

JP Morgan is pulling out of Bankia after buying 30% of the Spanish lender in order to avoid speculation risks during Bankia?s first rout in the public markets. On August 19, the Comisión Nacional del Mercado de Valores (CNMV) acquired Bankia shares in order to stabilize the market. With JP Morgan?s flight, Bankia is mature enough to be left in investors? hands. The end of the stabilizing period could deliver a hard blow to the group of savings banks that the lender considering that JP Morgan had 45.56 million shares, or 2.62% of Bankia?s capital.

Nearly all the purchases were completed for around 3.75 euros per share, which coincides with the IPO price. The last trading day that the shares of the company closed above this price was last Thursday, when they subsequently fell 2% to 3.68 euros per share.

If the lowest registered base price was 3.54 euros per share, then JP Morgan invested at least 161 billion euros in Bankia in order to purchase enough shares to buy 2.62% of the company. In addition to the 45.5 million shares that JP Morgan bought when coordinating Bankia?s IPO deal, the American lender has acquired 83 million shares that were utilized for proprietary trading as well as client portfolios. For its part, JP Morgan has sold 12.3% of the shares it acquired previously, or about 34 million shares.

Despite the fact that JP Morgan has become a steward for Bankia?s shares, it also holds the role of executor for purchase orders for various funds and shareholders so that, in principle, no shares would remain for them. ?JP Morgan has finished with the stabilization period shares and as a leading syndicator in this deal because during the next few weeks they will unload their shares,? explained sources from the company.