Troubled Bankia lays off 800 directors of firms it part-owns

City A.M. Reporter
SPANISH lender Bankia has cut back the vast majority of its external directors over the past year, it emerged yesterday.

In a cost-cutting drive to save €7m (£5.9m) per year, the bank has sacked 800 of the 1,000 directors it appointed to the boards of firms it owns stakes in, the Financial Times reported last night.

Traditionally Bankia has given the positions to directors with links to political parties as part of a system of patronage.

The system rose further up the bank, with its board also dominated by politicians, their families, and trade union leaders.

Bankia was created in 2010 out of seven savings banks, but later went bust and was bailed out by the taxpayer.

It comes after Bankia was forced to sell off its ownership of some other firms, under conditions imposed by the EU.

That includes stakes in airline owner IAG as well as defence firm Indra.