BBVA Profit Falls 14 Percent – Misses Estimates

October 27 00:00 2011

New York, October 26 ( – Spain’s second biggest bank, BBVA reported on Wednesday that its profits fell 14 percent to 3.14 billion euros ($4.37 billion) in the first nine months of the year, falling short of the market estimate of 3.21 billion euros as volatile financial markets depressed trading revenues in the third quarter. The fall in net profit was 4.98 percent excluding the hit on trading revenues.

The net interest income was, however, broadly in line with expectations at 9.68 billion euros, mainly due to an improvement in trend in the third quarter. Margins of Spanish banks are under increasing pressure as access to international money markets has become more difficult and expensive for them due to the euro zone debt crisis.

An analyst at a leading Spanish bank said the “decline in trading revenues was a bit more than we expected, but otherwise results look reasonably good.” BBVA’s core capital adequacy ratio stood at 9.1 percent of assets at the end of September, up from 9.0 percent at the end of June.

On Saturday, EU finance ministers inched towards an agreement that will provide 100 billion euros to European banks who would then have to raise their core tier 1 capital ratios to 9 percent risk-adjusted assets to help them withstand losses on euro zone sovereign debt.