Soured Property Assets Batter Spain's BBVA Bank
Spain's number two bank, BBVA, said Wednesday it had taken a battering from the slumping value of property-related assets, leading to a third-quarter net profit plunge.
Net profit dived 81.8 percent from a year earlier to 146 million euros ($190 million) in the third quarter, the bank said. Net banking income surged 18 percent, however, to 3.88 billion euros.
Investors apparently welcomed news that Spain's second bank after Banco Santander was cleaning up its balance sheet of bad investments made in a property bubble that burst in 2008.
BBVA shares rose 1.93 percent to 6.444 euros in morning trade.
So far this year, BBVA said it had set aside two-thirds of the required provisions against its real estate exposure in Spain, in line with Spanish financial reforms passed this year.
"BBVA's plan to absorb the entire impact on the market of the Spanish financial reform during 2012 remains unchanged," it said in a statement.
In the first nine months of the year, the bank said net profit fell 47.3 percent from a year earlier to 1.656 billion euros.
But operating income, which determines its ability to set aside provisions, surged 16.1 percent to nine billion euros over the same period.
BBVA said its takeover of small Spanish savings bank Unnim had a positive impact of 320 million euros on its accounts.
BBVA's ratio of non-performing loans rose slightly to 4.8 percent of total loans from 4.1 percent a year earlier, still well below Spanish average, which hit a record high above 10 percent in August.
Source: Agence France Presse
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