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Since the election the new Rajoy government has forced the banks into making honest disclosures of the true extent of their property losses. Banesto is the first bank to report this quarter others are to follow. Their profits are down 88% after provision. 😯
http://www.ft.com/cms/s/0/6da91568-846d-11e1-b6f5-00144feab49a.html#axzz1rpz2wKVjMergers are now about to happen as a result of government pressure to clean up the mess. The first of these to be Caxiabank and Banca Civica now in final talks.
Rajoy’s government are dealing at last with the mess left behind by the previous government who seemed incapable of effective action.
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By Victor Mallet in Madrid
Net profit at Banesto, the Spanish domestic bank controlled by Santander, fell 88 per cent to €20.2m in the first quarter of this year from €169.5m in the same period of 2011, the bank said.
Banesto, closely watched because it is the first Spanish bank to publish its results each quarter, attributed the profit fall mainly to the extra provisions for bad property loans demanded by the new centre-right government in a drive to clean up banks’ balance sheets.
The banks said it had set aside €475m of the new provisioning requirements in the first quarter, half the amount that would be needed in the full year, in addition to other provisions.
However, the bottom line was also helped by €365m of extraordinary gains, partly from the sale of shareholdings and loan assets, without which the bank would have made a loss. Net profit also benefited from a €4m tax credit. Banesto made a net loss of €173.3m in the previous quarter.
In an attempt to improve their capital ratios, Spanish banks have been cutting their lending, especially to the private sector, and Banesto’s total lending fell 8.3 per cent in the first quarter.
The bank’s net interest income fell 8.6 per cent to €347.8m compared with the first quarter of last year, but the bank said it was up 7.4 per cent over the final quarter of 2011.
Banesto’s bad loan ratio continued to rise, increasing to 4.93 per cent of risk-weighted assets from 4.15 per cent a year earlier, but it remains below the average for Spanish banks.
Its core tier one capital ratio rose to 9.23 per cent from 8.64 per cent and already exceeds the new minimum targets set by European and Spanish regulators. -
@logan wrote:
By Victor Mallet in Madrid
Net profit at Banesto, the Spanish domestic bank controlled by Santander, fell 88 per cent to €20.2m in the first quarter of this year from €169.5m in the same period of 2011, the bank said.
Banesto, closely watched because it is the first Spanish bank to publish its results each quarter, attributed the profit fall mainly to the extra provisions for bad property loans demanded by the new centre-right government in a drive to clean up banks’ balance sheets.
The banks said it had set aside €475m of the new provisioning requirements in the first quarter, half the amount that would be needed in the full year, in addition to other provisions.
However, the bottom line was also helped by €365m of extraordinary gains, partly from the sale of shareholdings and loan assets, without which the bank would have made a loss. Net profit also benefited from a €4m tax credit. Banesto made a net loss of €173.3m in the previous quarter.
In an attempt to improve their capital ratios, Spanish banks have been cutting their lending, especially to the private sector, and Banesto’s total lending fell 8.3 per cent in the first quarter.
The bank’s net interest income fell 8.6 per cent to €347.8m compared with the first quarter of last year, but the bank said it was up 7.4 per cent over the final quarter of 2011.
Banesto’s bad loan ratio continued to rise, increasing to 4.93 per cent of risk-weighted assets from 4.15 per cent a year earlier, but it remains below the average for Spanish banks.
Its core tier one capital ratio rose to 9.23 per cent from 8.64 per cent and already exceeds the new minimum targets set by European and Spanish regulators.Thanks a lot.
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Rather differently Sgn Botin of Banco Santander reports a robust position for his Banco Santander and a 56cent dividend confirmed for this year. Holders of Banco Santander shares bought recently are getting a feast of a divi -but those who paid a lot more for them are now seeing a big capital loss and I am glad not to be one. With the shares downto around 5euros -how much further might they fall! After all Santander hold thev sovereign debt and they are not insulated from any further property price falls resulting in negative equity and further losses on repossessions that cannot be sold at full value. AS for UK holders of Spanish equities there is the increasing tax on the dividends and the nauseating attitude of the Hacienda requiring UK residents to fill in 210 Tax Forms if they dispose of shares in Spanish Companies within 30 days or risk a 100 euro fine or more. Furthermore forb how much longer can Mr Botin justify such a high yield brought about by the collapsing share price?
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Banesto is part of Santander. One of the reasons Santander is in a better position than most banks is because of the wise period of investment, diversification and acquisitions the bank made in the last 15 years outside of Spain, particularly in the US.
That is not to say they are immune from the crisis, they do have a huge negative property portfolio, they are just better placed comparatively.
Incidentally their consumer investment offers are lousy.If you want my advice don’t invest in Spanish anything at the moment, shares, property, land etc. The taxation risk will only get worse as the government seek to stem the tide of fiscal disaster waiting. In any case capital gain is unlikely and capital loss is almost predictable.
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I bet you can find great investment opportunities in Spain if you want to move your company or something similar over there. A friend of mine just got hefty tax rebates for doing so. Just the promise to bring in potential job opportunities can be enough. Very shady business though if you ask me. All great wealths are created when the normal market is in chaos but you need to be ruthless.. like Adhelsson if he decides to build a a casino park in Spain…
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