Thursday April 30, 12:11 PM
UPDATE 1-Sabadell Q1 falls 25 pct after provisions
MADRID, April 30 (Reuters) - Spain's Banco Sabadell posted a 25 percent drop in first-quarter net profit on Thursday after raising its provisions against credit risk.
Sabadell said its first-quarter net profit fell to 162.11 million euros ($215 million) after booking a further 137.9 million euros in precautionary provisions against bad debts.
Without taking provisions into account, net profit rose 10.8 percent to 240.7 million euros during the three months to the end of March, it said.
Spanish banks were obliged by the Bank of Spain to create a cushion of provisions against bad debts after Spain's last economic crisis, in the early 1990s. The implosion of a massive property boom is eating at loan books as mortgage holders lose their jobs and property developers fail.
The bad loans ratio at Spain's fourth-largest bank by market capitalization rose to 2.82 percent at the end of March against 2.35 percent at the end of 2008. The bank has said non-performing loans (NPLs) may rise to 4.5 percent in 2009.
($1=.7547 Euro)
(Reporting by Sonya Dowsett; editing by Karen Foster)
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