Spain's BBVA bank reports lower profits
Spain's second-biggest bank BBVA reported on Thursday that first-quarter profits were down 7.3 percent from the equivalent figure last year at 1.15 billion euros ($1.71 billion) but said its bad loan ratio had improved.
Net interest income -- the difference between interest paid out on deposits and interest earned on lending -- fell 6.2 percent at 3.17 billion euros.
Core capital was 8.9 percent of all capital, up from 8.1 percent a year earlier, and above the minimum level set by the Bank of Spain of 8.0 percent this year in a bid to revive market confidence.
But bad loans as a proportion of total lending, a key indicator of financial health, were 4.1 percent, the same as at the end of 2010 and down from 4.3 percent a year earlier.
Most major Spanish banks, including the eurozone's largest, Santander, have seen a rise in their first-quarter bad-loans ratio.
The BBVA result was slightly worse was than forecast by analysts contacted by Dow Jones Newswires, which foresaw net profits of 1.06 billion euros.
BBVA shares fell 0.41 percent to 8.52 euros on the Madrid stock market after the opening in a stable market.
Like other Spanish banks, BBVA is struggling with an economic downturn, brought about by a collapse of the country's once booming property market in 2008.
But the group has recently sought to invest in two strategic markets: Turkey, where its purchased a 24.9-percent stake in the Garanti bank, and India with the creation of a credit card joint venture with the state-owned Bank of Baroda.
The group Thursday also reported record gross income in Mexico, South America and Asia, "confirming the strength of the bank's portfolio of assets."
"Once again BBVA demonstrates its ability to generate solid and recurrent earnings in the present economic environment," the group said.
"The group's net attributable profit in the first three months of 2011 reached 1.15 billion euros, the highest level of the last three quarters.
"Revenues were also higher compared to the previous two quarters.
"Diversification, with more than half its gross income generated in emerging markets, and superior risk management are the main factors supporting the BBVA Group net attributable profit."
© 2011 AFP