BBVA’s H1 profits hit by new Spain’s provisions
Banco Bilbao Vizcaya Argentaria (BBVA), Spain’s second biggest bank, posted a 58% profit decline at the end of H1, caused by the implementation of new government provisions to limit the bank’s exposure to toxic real estate loans.
As part of the new requirement, the bank set aside €1.43bn, about a third of the €4.6bn total provisions required to be set aside by the end of the year.
BBVA’s net income decreased from €505m from €1.19bn in 2011.
The performance was offset by profits of BBVA’s Latin America division, increased from €774m in the first half of 2011 to €1.02bn in 2012.
Latam profits were driven by strong domestic credit demand and increased pace of deposit taking, the bank said.
A few days ago, Spain’s Santander, the biggest eurozone bank by capitalisation, reported a similar profit decrease in the second quarter, due to the drastic increase in provisions ordered by the government.
The bank’s net profit from April to June fell by 92.8% to €100m.