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Spain's BBVA bank Q3 profit down 1 pct

Spanish bank Banco Bilbao Vizcaya Argentaria said Tuesday its third-quarter net profit dropped 1 percent from a year earlier as defaults on loans increased amid the recession.
/ Source: The Associated Press

Spanish bank Banco Bilbao Vizcaya Argentaria said Tuesday its third-quarter net profit dropped 1 percent from a year earlier as defaults on loans increased amid the recession.

Spain's second-largest bank by market capitalization, BBVA said net profit for the three-month period was euro1.38 billion ($2.07 billion) compared to euro1.39 billion in the third quarter a year earlier.

The effects of bad loans was partly offset by a 13 percent rise in net interest income — a bank's main source of revenue — to euro3.43 billion and a 2 percent cut to operating costs.

The bank called the results "excellent" and said they were "obtained despite the very complex financial and economic environment."

As a proportion of lending, the non-performing loans jumped to 3.4 percent in the third quarter, up from 1.7 percent a year earlier. The rate was up from 3.2 percent in the second quarter.

Despite the rise, the bank said the ratio still "compares very favorably with the average of its European competitors."

Lending volumes were euro331 billion at the end of September, down 4 percent on the year.

BBVA's share price was down 1.2 percent at euro12.33 ($18.52) in early morning trading in Madrid.

The bank's net profit for the first nine months was down 3 percent to euro4.18 billion while net interest income was up 20 percent to euro10.29 billion.