MADRID: Spanish lender Bankia has reported annual earnings hurt by provisions to cover potential compensation claims from thousands of investors in its 2011 flotation, who were left out of pocket by its subsequent state bailout.
Bankia, rescued in 2012 at the height of the eurozone debt crisis, said on Saturday net profit rose 22 percent from the year before to €747m, after the bank as expected set aside €312m for any payout, representing the maximum potential liability linked to the float.
The provision equates to the first 40 percent of total costs estimated at €780m, while its parent BFA would assume the remaining 60 percent if necessary.
The results came a day after Bankia said it would pay its first-ever dividend, in a symbolic move to return some of the funds from its €22.5bn bailout.
Paying a dividend means giving money back to the state as a shareholder, Bankia Chairman Jose Ignacio Goirigolzarri noted.
Bankia also reported a 14 percent rise in net interest income — broadly what a bank earns on assets minus what it pays out on deposits — to €2.9bn, in line with analysts’ expectations.
But its loan book shrank by 6 percent during the year, in line with other Spanish banks. The bank also reported an improvement in loan quality at end-December, as Spain’s economy rebounded from a six-year downturn. Bad loans as a percentage of total loans stood at 12.9 percent against 14.7 percent a year ago, though the ratio remains above the average for Spanish banks.
Reuters
