Small savers who were mis-sold preference shares at state-owned bank Bankia stood to lose 75% of their investment as shares dropped to an all-time low of .54 euro, by mid-day on Tuesday (May 28).

More than 11 billion shares issued as part of a 15.5-billion-euro (£13.2 billion) recapitalisation of the Spanish bank started trading on Tuesday at 0700 GMT in what was meant to be a new beginning after a 24-billion-euro bailout last year.

Following the cash injection, the Spanish state owns 68.4 percent of Bankia, with the rest held by former holders of preference shares and hybrid debt, often small savers who were mis-sold these complex financial instruments and were forced to swap them at a discount for ordinary shares.

The ordinary shares were issued at 1.35 euro but were trading at the initial price of 0.6 euro on Tuesday, falling to an all time low of .54 euro by midday.

Analysts expect the price to settle somewhere between 0.45 to 0.6 euro and have little hope of a quick recovery as tough business conditions and a challenging restructuring plan weigh.

On Tuesday about 150 preference share owners, mostly retired, gathered outside a Caja Madrid branch, part of Bankia, in central Madrid to demand their money back after being mis-sold preference shares as secure investments.

Despite the losses, most savers who bought preference shares and hybrid debt are now expected to sell their new shares on Tuesday to try to recoup part of their money. This however is expected to add downward pressure to a stock which already lost more than 50 percent last week when institutional investors triggered a mass sell-off as they received their shares.

Further pressure on Bankia will come from a recession which economists expect to last at least another two quarters.

The bank also needs to pay back public aid and cheap ECB loans received last year and faces a possible new round of provisioning to cover losses on the refinanced loans portfolios.

Presented by Adam Justice