Madrid: Spain’s state-rescued lender Bankia posted a forecast-beating 12.8 per cent rise in first-quarter net profit on Monday, though the bank’s margins disappointed investors and sent the shares down more than 2 per cent.
Like peers Caixabank and Sabadell, which reported results last week, Bankia is seeing clear signs of a recovery, with revenues and net interest income stabilising while bad debt is beginning to fall.
Yet low interest rates and subdued credit demand from consumers and companies continue to weigh on performance, forcing the banks to focus on profitability rather than expansion.
Bankia’s first-quarter net profit of 244 million euros ($265 million) beat forecasts, but net interest income was down 0.6 per cent at 693 million euros, missing the average estimate of 701 million euros in a Reuters poll of analysts.
“Recurring income is down sharply on the quarter, as is the net interest income and the fees, which slows down the recovery seen in previous quarters,” Renta4 analysts said in a note.
Shares in the bank were down 2.7 per cent at 1.26 euros by 0745 GMT.
Bankia, once a symbol of Spain’s financial crisis after receiving a 22 billion euro bailout, is seeking strong growth this year and last week approved payment of the first dividend in its short but troubled history.
It is targeting group profit of about 1.2 billion euros in 2015, against 747 million euros last year, when the bank set aside 312 million to cover compensation claims from investors who bought into its ill-fated 2011 flotation.
Bankia, which is still grappling with the fallout from the listing, aims to increase lending to small businesses by 10 per cent this year, looking a return on equity (ROE) profitability ratio of at least 10 per cent.
