CaixaBank Profit Up as Bad Loan Provisions Fall--Update
July 29 2016 - 03:52AM
Dow Jones News
By Jeannette Neumann
MADRID--CaixaBank SA (CABK.MC) said Friday that net profit beat
analysts' estimates and rose in the second quarter from a year
earlier on lower provisions for loan losses.
CaixaBank, Spain's No. 3 bank by market value, said net profit
was 365 million euros ($404.38 million) in the second quarter of
this year compared with EUR333 million a year earlier. That beat
analysts' estimates of EUR317 million, according to a poll by data
provider FactSet.
Shares were up around 3% in morning trading in Madrid.
CaixaBank said net interest income in the second quarter fell to
EUR1.02 billion from EUR1.13 billion a year earlier.
Net interest income, a key profit driver for retail banks, is
the difference between what lenders pay clients for deposits and
charge for loans. Analysts had anticipated net interest income of
EUR1 billion, according to Factset.
In addition to negative interest rates and the weak demand for
loans, which has been a drag on net interest income, CaixaBank and
other Spanish lenders have also stopped enforcing clauses in
clients' contracts that set a downward limit on how far interest
payments could fall. Spanish courts have said the mortgage floors
violate consumer protection laws and need to be removed, a further
hit to net interest income.
CaixaBank reported a capital ratio in the second quarter of
11.5% under international regulations known as "fully loaded" Basel
III criteria, a slight dip from the 11.6% the bank reported in the
first quarter.
That figure is "the most negative surprise in the quarter," Citi
analyst Stefan Nedialkov wrote in a research report. He had been
expecting CaixaBank to report 12%.
Write to Jeannette Neumann at jeannette.neumann@wsj.com
(END) Dow Jones Newswires
July 29, 2016 03:37 ET (07:37 GMT)
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