CaixaBank Profit Slumps on Real Estate Costs, Lower Dividends

CaixaBank SA, Spain’s fourth-biggest lender, said second-quarter profit fell 78 percent as the company set aside more money for real estate losses and dividend income from Telefonica SA declined.

Profit dropped to 118 million euros ($145 million) from 533 million euros a year earlier, the Barcelona-based lender said in a filing to regulators today. Earnings exceeded the 94.7 million-euro average estimate in a Bloomberg survey of five analysts.

CaixaBank is among Spanish lenders responding to two orders this year from the government to recognize losses more quickly on souring real estate assets that piled up on their balance sheets as the country’s property boom turned to bust. CaixaBank also said its revenue from dividend payments for stakes in companies such as Telefonica fell 41 percent.

Bad loans as a proportion of total lending rose to 5.58 percent from 5.25 percent in March and 4.90 percent in December, the lender said. Loans newly classified as in default jumped to 2.51 billion euros from 1.89 billion euros in the first quarter and 1.80 billion euros a year ago.

CaixaBank said it took 300 million euros of the 2.1 billion euros of provisions it needs to take under the government’s second order in May to banks to clean up real estate and has until next June to do the rest. It complied with the 2.44 billion euros provisioning requirement from the first real estate decree in February during the first quarter.

Net interest income climbed 22 percent to 903 million euros, the bank said.

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