Spain's fourth-biggest bank, Bankia, said Friday it will ask the government for 19 billion euros ($24 billion) in the largest bank bailout in the country's history.
The bank, which holds some 10 percent of the nation's bank deposits, said the request will be part of a recapitilsation plan which it approved at a board meeting on Friday and is backed by the government and the Bank of Spain.
"This plan has identified capital needs of 19 billion euros which will be entirely covered by the state," it said in a regulatory filing.
The government already spent 4.5 billion euros on Bankia earlier this month when it partially nationalised the lender.
The state took a controlling 45-percent stake in Bankia by converting a loan for that amount to its parent group Banco Financiero de Ahorros (BFA) into equity.
The bailout requested by Bankia on Friday will bring to 23.5 billion euros the total amount spent by the Spanish government to rescue the bank, which was formed in 2010 from a merger of seven troubled regional savings banks.
Spanish banks are at the heart of market fears that Spain, the eurozone's fourth-largest economy, could be forced to seek an international financial bailout.
Earlier this week Economy Minister Luis de Guindos estimated Bankia would need around seven billion euros to shore up its finances although he said his government would provide whatever funds were needed.
Bankia shares were suspended from trading Friday ahead of the bank's board meeting after newspaper reports said it planned to ask the state for aid of 15-20 billion euros.
Under the recapilitisation plan it approved Friday, Bankia's parent group BFA will ask Spain's bank restructuring fund FROB to subscribe to a capital increase of 19 billion euros.
Bankia will then launch a 12 billion euro capital increase which will be underwritten by BFA.
"Bankia clients can have absolute confidence that their savings are now safer than ever," said Bankia president Jose Ignacio Goirigolzarri.
The bank also announced that it had revised its results for 2011. Instead of posting a net profit of 309 million euros, it recorded a net loss of 2.979 billion euros due to write-downs made in its loan portfolio.
Bankia had problematic property assets amounting to 31.8 billion euros at the end of last year, according to Bank of Spain figures.
Standard & Poor's on Friday cut its credit ratings for five Spanish banks, including Bankia and its parent group BFA.
It downgraded Bankia to BB+, one notch into junk status, from BBB- and reduced its rating for BFA, which was already in junk status, to B+, four notches into junk territory, from BB-.
Standard & Poor's also cut its rating for Bankinter, Banco Popular and Banca Civica.
Daniel Pingarron, an analyst at Spanish brokerage IG Markets, said the injection of public funds into Bankia to save it "will not change things very much."
"What will happen is the FROB funds will run out, the fund will have to be replenished with public debt, and that does not sent a message of confidence" to markets, he added.
The government could add two other savings banks under its control, Novacaixagalicia and CatalunyaCaixa, to Bankia, which would create "the biggest public bank in Spanish history", and then sell the lender, Pingarron said.
The government refused to comment on this possibility.
Prime Minister Mariano Rajoy's conservative government this month instructed Spain's banks to set aside an extra 30 billion euros in 2012 in case property-related loans go bad, on top of 53.8 billion euros required under reforms enacted in February.
Bankia's shares plummeted 7.43 percent on Thursday to close at 1.57 euros, taking total losses to more than 58 percent since their listing in July 2011.