Spain’s CaixaBank reports profits halved

Spanish lender CaixaBank posted on Thursday a first-quarter net profit of €152 million ($210 million), a 54.6-per cent drop from the figure at same time last year when it was boosted by one-off gains from acquisitions.

Spain's CaixaBank reports profits halved
CaixaBank vice president Joan Maria Nin reported the results at a news conference on Thursday. Photo: LLUIS GENE / AFP

Spain's third biggest bank by capitalization said its ratio of bad loans as a portion of total loans fell to 11.36 per cent from 11.66 per cent in the same year-ago period.

It was the first time that its bad loan ratio has fallen since 2008, when Spain's decade-long property boom collapsed, causing millions of people to lose their jobs.

Net interest income, or earnings from loans minus funding costs, inched up 0.1 per cent to €993 million.

Don't miss stories about Spain, join us on Facebook and Twitter.

"What we have noticed, especially during the final quarter, points to an improvement in net interest income, a gradual reduction in doubtful debts and the stabilisation of damaged assets," CaixaBank vice president Joan Maria Nin told a news conference.

CaixaBank's 2013 first-quarter results were boosted by the first time consolidation of earnings from Banca Civica and Banco de Valencia, two troubled regional savings banks which the lender acquired.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Spain’s Banco Popular to axe 3,000 jobs in cost cutting plan

Spain's struggling Banco Popular said on Tuesday that it plans to axe up to 3,000 jobs, about a fifth of its workforce, in the latest round of cost cutting by a Spanish lender.

Spain's Banco Popular to axe 3,000 jobs in cost cutting plan
The bank plans to close around 300 of its 2,000 branches in Spain as part of a restructuring plan. Photo: AFP

The bank plans to close around 300 of its 2,000 branches in Spain as part of a restructuring, it said in a statement.   

“This restructuring process will affect between 2,900 and 3,000 people,” the statement said.

The bank said it would negotiate the job cuts with unions.    

Banco Popular, Spain's seventh largest bank by market capitalisation, announced a cost-cutting plan in July, a month after raising €2.5 billion ($2.8 billion) in a share issue to clean up its balance sheet.

Like other Spanish lenders, it is making a major push to sell off real estate assets, including repossessed homes, which are clogging up its balance sheet and eating into earnings.

Banco Popular in July reported a second quarter net profit of just €122,000 and announced provisions on bad loans of €4.7 billion.

Spanish banks, which slimmed down after a decade-long property boom went bust in 2008, are once again closing branches and slashing jobs as their profitability is hit by stiff competition.

Santander, the eurozone's biggest bank by market capitalisation, plans to close 450 smaller branches and cut 1,400 jobs in Spain, about five percent of the staff in its home market, through voluntary departures.

Barcelona-based CaixaBank, Spain's third-largest bank, plans to cut 3,000 jobs, mainly through early retirement, as it seeks to trim its salary costs.    

Spain has the densest bank branch network in western Europe, with 8.6 branches per 10,000 residents, according to consultancy Roland Berger.  

The average in the entire European Union is five branches per 10,000 residents.