By Christopher Bjork
MADRID--Spain's Caixabank SA said Thursday its net profit nearly
doubled in the latest quarter, helped by a recent takeover, higher
lending income and gains on a portfolio of stakes in several other
firms.
Spain's third-largest bank by market value said that
first-quarter net profit rose 99% from a year earlier, to EUR375
million ($402.7 million). Analysts polled by data provider FactSet
had anticipated net profit of EUR317.2 million.
The Barcelona lender reported net interest income of EUR1.14
billion, an increase of just under 15% compared with a year earlier
and in line with analyst expectations. The recent EUR800 million
purchase of the Spanish unit of Barclays Bank PLC as well as lower
financing costs helped lift net interest income--the difference
between what banks pay for deposits and what they charge for
loans.
Spanish banks continue to grapple with lingering losses from the
country's 2008 real estate bust, and borrowers haven't recovered
from a deep economic slump, putting a lid on lending. However,
seven straight quarters of economic growth have stabilized the
property market and bad loans are no longer growing, meaning
lenders can reduce the amount of funds they are setting aside to
cover loan losses.
"A more favorable economic environment should facilitate banks'
workout of problematic exposures," debt rating agency Standard
& Poor's wrote in a report on Spanish banks published
Wednesday. It added that that these problem loans nonetheless are
likely to remain large compared with those of other countries.
Bankinter SA, a smaller Spanish lender, Thursday said its
first-quarter net profit rose 45% to EUR87.2 million, partly due to
a 28% drop in loan loss provisions.
Caixabank said its losses on foreclosed properties and loans to
real-estate developers totaled EUR557 million in the quarter, while
the remaining banking and insurance business added EUR813 million.
It also booked EUR119 million in profits stemming from dividends
and other income from its holdings in several foreign lenders as
well as Spanish blue-chip companies Telefónica SA and Repsol
SA.
The EUR800-million Barclays purchase helped Caixabank increase
its loan book by 7.6% on the year, and overall assets by 5%, to
EUR355.6 billion. Caixabank said cost savings from folding in
Barclays would be higher than it had targeted, allowing the lender
to boost return on invested capital invested to 15%. Its earlier
estimate had been for a return of 10%.
Costs rose by an annual 9.5%. In addition, Caixabank assumed
EUR239 million in restructuring charges related with the Barclays
buy.
Caixabank is locked in a takeover battle with major shareholders
in Portugal's Banco BPI SA who say the Spanish bank should be
offering more to investors. BPI's board said Caixabank needed to
raise its EUR1.09 billion offer. Caixabank has rebutted that its
offer was fair.
Write to Christopher Bjork at christopher.bjork@wsj.com
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