Caja Madrid earns more but non-performing loans double
Spain second-largest bank says net profit for first three months is up 7.9 percent while loan defaults has doubled.16 April 2008
MADRID - Caja Madrid said on Tuesday its net profit in the first three months of the year was up 7.9 percent, but also noted loan defaults almost doubled as a result of higher mortgage rates.
Spain's second-largest savings bank said it earned EUR 353.6 million in the first quarter. The non-performing loan ratio hit 1.36 percent of its total credit portfolio, compared with 0.7 percent a year earlier.
The bank attributed this to homeowners being more than 90 days behind in mortgage payments due to higher interest rates and increased unemployment.
Chairman Miguel Blesa said Caja Madrid was confident about the future despite an ongoing global credit crunch. He said the bank had liquidity of EUR 11 billion which left it in a "comfortable" situation to meet its funding needs to the middle of next year.
Caja Madrid announced Monday it is buying an 83-percent stake in City National Bank of Florida for EUR 618 million. Blesa said Caja Madrid was up to other acquisitions in the United States and Eastern Europe, particularly Romania and Poland.
The savings bank also announced Monday it plans to group together firms it manages or has a controlling stake into a holding company, which will then be floated.
[El Pais / C.D. / Adrian Soto / Expatica]