By Victor Mallet in Madrid
Caixabank, the biggest retail bank in the Spanish domestic market, said on Friday that its net profit fell 13 per cent last year to 1.05bn euros from 1.21bn euros in 2010, after setting aside increased bad loan provisions and boosting its capital ratios to meet regulatory requirements.
The bank – formed from the Barcelona-based La Caixa savings bank and a smaller one from Girona in last year’s round of Spanish bank restructuring – is one of Spain’s big three alongside the multinational lenders Santander and BBVA.
Caixabank has been named by bankers as a possible buyer for Bankia, the conglomerate bank formed out of Caja Madrid and six other savings banks, but Isidro Fain?, CaixaBank chairman, denied there were any negotiations.
Net interest income fell 7 per cent to 3.17bn euros in the year.
Like other Spanish banks, CaixaBank has been affected by Spain’s collapsed housing market, the eurozone’s economic crisis and European regulatory demands for more capital.
It said it had strengthened its balance sheet last year with bad loan provisions of 2.41bn euros and a further 706m euros in extraordinary provisions, while leaving untouched its generic bad loan provisioning fund of $1.83bn.
The bad loan ratio rose sharply to 4.90 per cent of assets in December from 3.65 per cent a year earlier, although that was still below the sector average of 7.51 per cent.
CaixaBank’s core capital as a percentage of assets, under the existing Basel II regulations, reached 12.5 per cent, one of the highest ratios among Spanish lenders and up 3.6 percentage points over the year.
The bank also announced that it had already reached the differently calculated 9 per cent capital ratio target set by the European Banking Authority.
I?igo Vega, analyst at CA Cheuvreux, said CaixaBank’s latest results for the fourth quarter of 2011 were roughly in line with consensus forecasts.
? The Financial Times Limited 2012