Victor Mallet
BBVA, the Spanish bank, fell into loss in the final quarter of last year after taking a writedown on its US business, but said on Thursday that it made 3bn euros of net profit over the full year despite the economic crisis in Spain and much of Europe.
The bank said it made a fourth quarter loss of 139m euros – compared to a profit of 804m euros in the third quarter and 939m euros in the fourth quarter of 2010 – following the 1.5bn-euro US writedown, which came to 1.01bn euros net of tax.
Ironically, the latest charge against profits, which follows a previous writedown of a similar size in 2009, helped boost BBVA?s core capital by 400m euros due to the tax treatment of goodwill. BBVA bought the 745-branch Compass business for $9.6bn in 2007.
Over 2011, BBVA?s net profit fell 35 per cent to 3.00bn euros, a similar decline to that reported earlier in the week by Santander, its bigger Spanish rival, which saw its profits cut by extraordinary provisions to cover loan losses in the Spanish property market.
BBVA?s net interest income fell just 1 per cent to 13.16bn euros, and it said its recurrent net profit, before the US writedown, fell 13 per cent to 4.02bn euros.
?Once again our earnings confirm BBVA?s extraordinary ability to generate profit, even in the most complex scenarios,? Francisco Gonz?lez, executive chairman, said in a statement. ?We strengthened our ability to growth during the crisis.?
The bank said its core capital had reached 10.3 per cent of risk-weighted assets under current international rules at the end of December, or 8.7 per cent (up from 7.1 per cent at end-September) under the stricter criteria of the European Banking Authority.
It said it would have no problem reaching the EBA?s 9 per cent requirement by June 30.