Banco Sabadell reports 29.7% profit slump, bad-loan rise

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Banco Sabadell, the sixth-biggest Spanish bank by capitalisation, reported a 29.7-percent fall in net first-half profit on Thursday to 164.3 million euros ($233.7 million).

The high-street bank said that doubtful loans as a proportion of total lending rose to 5.55 percent on June 30 from 4.09 percent at the same time last year.

Spanish banks continue to suffer from a real estate crash which is generating a high loan default rate which in turn generates substantial provisions.

Sabadell announced a provision of 545.5 million euros to cover asset depreciation and bad loans.

Fitch ratings agency said earlier this year that Banco Sabadell had a 10.8-billion-euro exposure to the real estate market

Total assets were valued at 95.94 billion euros at the end of June, a 10.2-percent increase from the figure a year ago.

Sabadell shares gained 0.50 percent to 2.605 euros, on a slightly rising market.

© 2011 AFP

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