Ailing Spanish bank CAM posts 1.7 bln euro loss
Spain's struggling Caja Mediterraneo (CAM), under state control since in July, posted Friday a nine-month loss of 1.73 billion euros ($2.33 billion).
That compares to the net proft of 142.6 million euros which the bank reported for the same time last year.
CAM also reported a non-performing loan ratio of 20.8 percent, far above the average of 7.16 percent for the entire sector in September and up from 5.2 percent during the same time last year.
The Bank of Spain announced on July 22 that it would take control of the CAM through an injection of 2.8 billion euros and the opening of a 3.0 billion euro line of credit. It now plans to sell-off the ailing savings bank.
The sale of CAM has been delayed until after Spain's general elections on Sunday at potential bidders' request, business daily Cinco Dias reported last month citing unidentified banking sources.
The CAM was one of five Spanish banks that failed new European stress tests on July 15 to see if they can survive a major crisis.
Spain's lenders, especially its regional savings banks which account for about half of all lending in the country, have been heavily exposed to bad debt since the collapse of the property sector at the end of 2008.
They are at the heart of market fears that Spain will follow Greece, Ireland and Portugal in asking for an international bailout.
The government and Bank of Spain have forced a wave of consolidation in the sector this year and are requiring banks to quickly increase the proportion of core capital they hold to above international norms.
CAM, based in the eastern coastal region of Alicante which was one of the worst hit by the bursting of the property bubble, had been set to merge with three other savings banks but the deal fell through earlier this year.
© 2011 AFP