Spanish banks face challenges despite boost in earnings

29 July 2013

Four of Spain's biggest banks have reported a big improvement in their earnings but still face a tough challenge as they attempt to contain bad debts and increase their shareholder value.

Bankinter increased its income by more than four times, while La Caixa more than doubled its profits and Sabadell saw a 37 per cent increase.

Bankia, which was bailed out by the government, announced last week it had made a €200 million ($265.5 million) profit in the first half of 2013 after making a €4.5 billion loss during the same period in 2012.

However, Banco Popular reported a fall in earnings, down three per cent.

Spain's international banks Santander and BBVA are releasing their results this week and are expected to record a profit after lower provisions for poor property loans created a helpful springboard.

In order to pay for the cleanup of Bankia and three other banks, the Spanish government asked the European Union for a credit line of as much as €100 billion, of which it has used just over €41 billion.

By Tony Aynsley

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