A trio of Spanish banks, including bailed out lender Bankia, posted big jumps in first-half profits as trading gains and lower writedowns on property assets helped a partial recovery from their torrid time last year.
Spanish bank profits were gutted last year by massive losses on soured real estate assets and a deep recession is still hurting firms as more borrowers struggle to keep up with loan payments. Bankia posted a 19.2 billion euro loss last year, the biggest of any bank globally.
It bounced back with a 200 million euro profit for the first half of this year. It had been expected to post a 246 million euro net profit, according to a Reuters poll of four analysts.
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The lender said net interest income, or the difference between income from loans and interest paid on deposits, was 1.1 billion euros, down 36 percent on the first half of 2012.
Sabadell set aside an extra 321 million euros ($425 million) towards provisions related to refinanced loans, some of which it will have to reclassify as non-performing ones, as instructed by the Bank of Spain.
The bank posted a 123-million-euro net profit for the first half of the 2013, beating analyst expectations after big gains from financial transactions,such as trading operations.
The Bank of Spain recently asked lenders to reclassify more of their refinanced loans as non-performing ones.
Bankinter's net profit in the first half was 102 million euros, sharply up from the same period a year ago when it was hurt by writedowns on rotten property assets.
Spain has been in or close to recession for five years, largely due to a bursting of a decade-long property bubble. It needed a 42 billion euro bailout of its banks last year, with most of the problems among its raft of smaller lenders.