Spanish Banks’ Financing Costs Spur Doubt on Profit

Spanish banks have more than 30 billion euros ($39 billion) in debt coming due in the next four months. That’s spurring investor doubt on their future profitability as higher financing costs eat into margins.

Concern that the country won’t be able to reduce the euro region’s third-highest budget deficit and avoid a European Union bailout has driven up financing expenses for banks. As Banco Espanol de Credito SA kicks off fourth-quarter Spanish bank earnings reporting tomorrow, investors will look for signs that lenders can sustain profit as costs climb.