MADRID: Two big Spanish finance groups, Bankia and Caixabank, reported rising profits in an encouraging sign for the sector two years after it nearly collapsed.
Bankia, which was bailed out by the Spanish government, said its net profits rose by 65 percent in the third quarter of 2014 from a year earlier to ¤266m ($337m), thanks to an increase in business and lower costs.
The bank said it had sharply reduced the number of bad loan debts weighing on its balance sheet — a legacy of the 2008 real estate collapse that plunged Spain into economic crisis — to 13.6 percent in the July to September period.
Bankia’s chairman Jose Ignacio Goirigolzarri said in a statement that an “improvement in revenues, diminishing of costs and strong reduction in non-performing loans” would help it meet its 10-percent capital profitability target for next year.
Bankia’s near-collapse in 2012 drove Spain to rescue it and then take a ¤41bn bailout from its eurozone partners to save other Spanish banks.
Courts are investigating alleged fraud in Bankia’s doomed 2011 stock listing.
This month it was hit by another scandal when a judge questioned ex-managers of Caja Madrid, one of the regional funds that were merged to form Bankia, over allegations they spent lavishly with company credit cards.
Also on Friday, Caixabank, Spain’s biggest bank by volume of assets, said its third-quarter net profits more than tripled to ¤161m compared to a year earlier.
AFP
