CaixaBank SA, Spain’s third-largest lender, said first-quarter profit jumped after booking a one- time gain of 1.77 billion euros ($2.3 billion) from the purchase of nationalized Banco de Valencia SA.
Net income climbed to 335 million euros from 48 million euros a year ago, the Barcelona-based bank said in a filing to regulators today. The profit beat the 220 million-euro average estimate in a Bloomberg (CABK) survey of eight analysts.
Spanish banks are anticipating earnings growth this year after carrying out the bulk of a real estate cleanup that required recognizing 84 billion euros of losses on assets that soured during the country’s property crash. Firms including CaixaBank still face rising defaults for company and consumer loans in a weak Spanish economy that is sapping credit demand.
CaixaBank posted a total of 2.22 billion euros of capital gains, including negative goodwill for Banco de Valencia, which it agreed to buy for 1 euro from Spain’s bailout fund in November. Negative goodwill is a gain occurring when the price paid for an asset is less than the stated fair value.
Loan-loss provisioning rose to 16.8 billion euros from 12.1 billion euros at the end of 2012 and tripled from 6.2 billion euros a year earlier, it said. Bad loans as a proportion of total loans at the bank’s 6,400 branches rose to 9.4 percent from 8.6 percent in December as loans to real estate developers deteriorated, CaixaBank said.
The core Tier 1 capital ratio, a key measure of financial strength, fell to 10.6 percent from 11 percent a year ago. The ratio of loans to deposits dropped to 126 percent from 129 percent, it said.
Net interest income, revenue from interest after subtracting interest paid, rose 12.3 percent in the first quarter from a year ago to 992 million euros after the bank purchased Banco de Valencia and Banca Civica SA.
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