Thursday April 30, 04:42 PM
RPT-Spain's Sabadell, Pastor profit down, bad loans up
By Sonya Dowsett
MADRID, April 30 (Reuters) - Spain's Banco Sabadell and Banco Pastor (Madrid: PAS.MC - news) saw first quarter profits fall as they hiked provisions against defaults by borrowers and braced for a further worsening of bad loan rates in the coming months.
Banco Sabadell, Spain's fourth-largest bank by market capitalisation, said net profit in the three months to end March fell 25.4 percent to 162.11 million euros ($214.8 million) after it booked 137.9 million euros in bad debt provisions.
This beat the 145.3 million euro forecast net profit average of a Reuters poll of seven analysts.
Without taking provisions into account, net profit rose 10.8 percent.
Rival Banco Pastor posted net profit of 45.1 million euros, down 68 percent. Profit in the year-ago period had been boosted by the sale of shares in utility Union Fenosa (Madrid: UNF.MC - news) .
Spanish banks were obliged by the Bank of Spain to create an extra cushion of provisions against bad debts after Spain's last economic crisis, in the early 1990s.
The implosion of a massive property boom is now eating away at loan books as mortgage holders lose their jobs and property developers fail.
The bad loans ratio at Sabadell rose to 2.82 percent of total lending at the end of March against 2.35 percent at the end of 2008, while at Pastor it rose to 4.1 percent from 3.6 percent at end of 2008.
The wider Spanish banking system's bad loan rate stood at 4.18 percent in February, its highest rate in 12 years, against a background of rising unemployment. Spain's jobless rate is double the average rate in the European Union.
Sabadell has said non-performing loans (NPLs) may rise to 4.5 percent in 2009.
Pastor would realise capital gains of around 400 million euros in April and May, Chairman Jose Maria Arias said in a statement, including 200 million euros from the sale of its 1.8 percent stake in Fenosa.
All gains would be contributed to the bank's provisions cushion to protect against bad debts, he said.
Barcelona-based Sabadell was flat at 4.37 euros by 1040 GMT, underperforming a 4.1 percent rise in the DJ European banking index, while Pastor was also unchanged at 5.09.
Sabadell's core capital ratio stood at 7.98 percent from 8.1 percent end-2008, while its coverage ratio against bad debt dropped to 96.71 percent from 107 percent a quarter earlier.
Banco Pastor's core capital ratio stood at 6.9 percent.
Sabadell's Tier-1 ratio was at 9.32 percent end of March compared to 8.7 percent at end-December. Banco Pastor's Tier-1 ratio stood at 8.1 percent.
(editing by John Stonestreet) ($1=.7547 Euro) Keywords: SPAIN BANKS/
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
