Spain's BBVA Q3 net profits slump 29.5 percent

AP News
Posted: Oct 26, 2011 4:51 AM
Spain's BBVA Q3 net profits slump 29.5 percent

Spanish bank BBVA said Wednesday its net profits in the third quarter slumped by 29.5 percent owing to lower revenue in its domestic market and liquidity stress caused by the sovereign debt crisis.

Spain's second-largest bank by market capitalization, BBVA said its profits for the quarter fell to euro804 billion ($1.12 billion) from euro1.14 billion in 2010.

It said net interest income increased 1.3 percent to euro3.29 billion from euro3.24 billion on the quarter a year earlier.

Net profits for the first nine months were down 14 percent to euro3.14 billion.

BBVA was one of several Spanish banks which had their debt ratings cut earlier this month by the three major international agencies, Fitch, Moody's and Standard & Poor's.

The bank's ratio of bad loans as a percentage of lending inched up to 4.1 percent, up from 4 percent in June.

BBVA registered most problems in Spain which accounts for the bulk of its lending. The bank said profits dropped 38 percent in the first nine months to euro1.16 billion while the bad loan ratio edged up to 4.9 percent from 4.7 percent in the second quarter.

Spain is struggling to emerge form a near two-year recession that has left it with a swollen deficit, a stagnant economy and a euro-zone high unemployment rate of nearly 21 percent.

BBVA's profits in Mexico were euro1.27 billion for the first nine months, up just 1.6 percent from euro1.25 billion.

BBVA was seen to be one of the most resilient banks in Europe in stress tests this summer month with its core capital ratio standing at 9 percent.

The bank's shares were down 0.94 percent at euro6.25 in morning trading in Madrid.