BBVA reports drop in quarterly profit as provisions weight
BBVA, Spain's second-biggest bank, reported on Wednesday a 17.4-percent drop in quarterly net profit as provisions for bad loans weighed on results.
Net profits in the July-September third quarter reached 1.14 billion euros (1.58 billion dollars) compared to 1.38 billion euros at the same time last year, it said in a regulatory filing.
Analysts polled by Dow Jones Newswires had forecast net income of 1.16 billion euros.
During the first nine months of the year BBVA posted a net profit of 3.67 billion euros, a 12.2-percent drop over the outcome at the same time last year.
The bank booked provisions, or a precautionary reserve for loans turning sour, during the third quarter of 233 million euros, although this was less than 260 million euros in the previous quarter.
Bad loans as a proportion of total lending dipped to 4.1 percent in the third quarter from 4.2 percent in the previous quarter and 4.3 percent during the first three months of the year.
BBVA is struggling with an economic downturn in Spain, brought about by a collapse of the country's once booming property market which has led many developers and homeowners struggling to meet their loan payments.
The International Monetary Fund forecasts that the Spanish economy, the fifth biggest in Europe, will contracted by 0.3 percent this year and grow by just 0.7 percent in 2011.
© 2010 AFP