CaixaBank Quarterly Net Misses Estimates on Fees, Margins

CaixaBank SA, Spain’s third-largest bank, reported first-quarter profit that missed estimates as low interest rates and weak demand for credit squeezed lending margins and reduced fees.

Net income fell to 273 million euros ($310 million) from 375 million euros a year earlier, the Barcelona-based lender said in a filing Thursday. That compares with 297 million euros, the average of five analyst estimates compiled by Bloomberg.

Chief Executive Officer Gonzalo Gortazar is looking to complete the lender’s first international acquisition and plans to quadruple profitability by 2017 by increasing revenue, reducing costs and lowering provisions. CaixaBank has offered about 900 million euros for the 56 percent of Portugal’s Banco BPI SA that it doesn’t own.

“Overall, a weak set of results due to the softer-than-expected top line evolution and higher-than-anticipated credit losses and impairments,” Fabio Mostacci, an analyst at Marabaud Securities, said in a note to investors.

Net interest income, the difference between what a bank charges for loans and pays for funding, dropped to 1.02 billion euros from 1.14 billion euros a year ago. The total fell after the lender removed “floors” on its mortgage contracts, which set a rate that won’t fall even when market rates are lower.

Net fees dropped 9 percent from a year earlier. Market volatility during the quarter drove a reduction in fees from products such as mutual funds, the lender said in a statement.

CaixaBank fell 4.5 percent in Madrid trading and was down 3.5 percent at 2.71 euros as o 9:08 a.m., extending this year’s losses to 16 percent. The lender is the third-worst performer on Ibex 35 Index in 2016.

in have fallen down 13 percent this year, making it one of the worst performers in the benchmark Ibex 35 index.

The lender’s fully loaded common equity Tier 1 ratio, a measure of financial strength, was unchanged at 11.6 percent in third quarter. Bad loans as a proportion of total lending dropped to 7.6 percent from 7.9 percent at the end of December, the bank said.

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