Spain's Banco Sabadell profits slump on provisions
Banco Sabadell, Spain's fourth-biggest bank by market capitalisation, posted on Thursday a 22.3 percent drop in net profit during the first quarter owing to increased provisions.
The bank reported net profits of 84.248 million euros ($125.041 million) for the January to March period.
The result "was attained after allocating 330.1 million euros to provisions and writedowns in the quarter, of which 186.2 million euros were the entire amount of extraordinary revenues recognised in the quarter."
Banco Sabadell, struggling like its Spanish rivals to cope with the collapse of a property boom, said bad loans as a percentage of total lending rose to 5.46 percent at the end of December from 4.09 percent a year earlier.
Its core capital stood at 9.37 percent at the end of the first quarter, up from 7.70 percent a year earlier, surpassing the 8.0 percent minimum set by the government in February.
Net interest income -- the difference between interest paid out on deposits and interest earned on lending -- reached 379.1 million euros, up 1.3 percent over the year.
"In the first three months of 2011, Banco Sabadell and its group again exceeded market expectations and registered positive performance despite the very adverse climate in the finance business," the bank said.
Sabadell is Spain's fourth largest bank by market capitalization, after Santander, BBVA and Banco Popular.
Santander Thursday posted a 4.8 percent drop in first-quarter net profits to 2.108 billion euros.
© 2011 AFP