Popular sees net profit up 15pc despite downturn
Spanish bank Banco Popular on Wednesday said it was well prepared for a change in the economic cycle and predicted its earnings this year would rise by 15 percent.24 January 2008
MADRID - Spanish bank Banco Popular on Wednesday said it was well prepared for a change in the economic cycle and predicted its earnings this year would rise by 15 percent.
Popular reported its net attributable profit last year was up 22.8 percent at EUR 1.26 billion.
Speaking at a presentation of the results, Chairman Ángel Ron said Popular had predicted a slowdown in the property sector and had already reduced its exposure. The bank also had nothing to fear from increasing loan defaults given its prudent approach to lending. The bank's non-performing loan ratio rose to 0.83 percent at the end of the year from 0.77 percent in September
Popular said it was shoring up its funding source after the international wholesale credit market started to dry up from August of last year as a result of the US subprime mortgage crisis.
The bank has been sourcing some 40 percent of its funding from commercial paper, bonds and securitisation. It has been turning increasingly to retail funding, with deposits in the fourth quarter alone climbing 26.9 percent.
Popular said it had a surplus of EUR 1.032 billion in customer funding over credit requirements at the end of last year.
The bank said it also had a "second line of liquidity" of over EUR 11 billion, which was more than enough to meet its funding requirements.
[Copyright EL PAÍS 2008]
Subject: Spanish news