By Christopher Bjork
MADRID--Caixabank SA (CABK.MC) on Friday reported a small profit
for the third quarter after setting aside most of its income to
cover a growing pool of bad debts.
Net profit at the Spain's third-largest bank by market value was
50 million euros ($69 million), up from EUR7 million in the same
quarter of 2012, but lower than in the three preceding
quarters.
Caixabank saw another dip in lending income in the third
quarter. Net interest income fell 7.7% to EUR977 million. Fee
income was roughly unchanged at EUR430 million.
The Barcelona lender's pool of bad debts grew by EUR5.4 billion
over the past year, to EUR25.7 billion, equivalent to 11.4% of its
loan book. A big part of the increase this year came after the bank
reviewed its portfolio of restructured loans and reclassified part
of that portfolio as nonperforming. The bank said EUR3.3 billion
worth of refinanced loans were reclassified as nonperforming during
the second quarter.
Spain's central bank had told lenders to review these loans
after detecting that some banks were using the refinancing to keep
shaky loans from becoming nonperforming.
Caixabank in the third quarter earmarked most of its pretax
profit, some EUR573 million, to cover potential losses on doubtful
loans.
Net profit in the first nine months more than doubled to EUR458
million from EUR173 million, the bank said. Banks reported meager
profits last year because the Spanish government forced them to
clean up their vast real estate portfolios.
Write to Christopher Bjork at christopher.bjork@wsj.com
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