Spanish bank BBVA: Profit leaps 33.6%

One of Spain's largest banks, BBVA, reported a surge in net profit for the third quarter of 2013 on Friday, joining a bandwagon of banks enjoying a recovery from hefty write-offs a year earlier. BBVA net profit climbed 33.6 percent from the same period last year to 195 million euros ($269 million) in the three months to the end of September. The bank benefited by comparison with the same quarter last year, when it had to make large provisions for potential losses from its Spanish property-related assets. The profits were nevertheless lower than the markets had anticipated. On average, seven analysts polled by Dow Jones News had tipped a net profit of 552 million euros. Net banking income dropped 9.2 percent to 3.55 billion euros over the same period. Further disappointing some investors, BBVA announced a more conservative policy of paying out dividends. The bank said it would distribute 30-40 percent of its earnings, as recommended by the Spanish bank regulator. It thus cancelled a dividend payment that had been programmed for January. BBVA shares fell 1.19 percent to 8.949 euros in the first half hour of trading on the Madrid stock exchange. BBVA, the second-largest in Spain by market value and third-largest by assets under management, strengthened its balance sheet by raising the ratio of rock-solid core capital to 11.4 percent of the total from 10.8 percent a year earlier. But the proportion of bad loans, mostly related to the collapsed property sector, rose to 6.7 percent of all credit extended from 4.8 percent a year earlier.