Banco Popular reveals loss-making quarter with €37bn toxic assets dragging on performance

Oliver Gill
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Portuguese Economy Facing EU Bailout
Banco Popular has undergone three leadership changes since last July (Source: Getty)

Spanish lender Banco Popular today revealed first quarter losses of €137m and was forced to up provisions against its €37bn pile of toxic property assets.

Banco Popular has the largest slice of non-performing loans in Spanish banking sector. And today the lender provisioned a further €500m against them.

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The results are the first under the stewardship of chairman Emilio Saracho. The bank has undergone three leadership changes in since July.

Last year Banco Popular banked €2.5bn in a capital raise. Saracho said he is considering either going back to shareholders to ask for more, or prepared to consider a merger deal.

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Net interest income flopped over nine per cent in the first three months of 2017 falling to €500m. This was three per cent lower than the final quarter of 2016, when it unveiled a €3.5bn annual loss.

The bank's fully-loaded capital ratio was 7.33 per cent at the end of March compared with 8.17 per cent at the end of December – it is still above regulatory requirements. Analysts told Reuters the fall indicated the bank needed to raise more money.

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