Bankia turns a profit after its restructuring

City A.M. Reporter
SPAIN’S biggest bailed-out lender Bankia showed the first fruits of a painful restructuring yesterday, posting a €72m (£61.6m) profit for the first quarter of the year despite bad loans and the continued national recession.

Bankia, which came to symbolise Spain’s banking crisis after making a record €19.2bn loss in 2012, has benefited from a relatively clean slate after transferring troubled real estate assets to a state-backed “bad bank”.

The bank’s parent company BFA reported a net profit for the first three months of the year of €213m, keeping it on target for a profit for the full year of €800m.

However, it may still struggle to hit that target as it copes with economic turmoil and tries to retain customers while it closes over 1,000 branches.

The bank’s net interest income fell to €512m in the first quarter compared to €844m a year earlier, while its non-performing loans ratio stood at 13.1 per cent of its total loan book in March, well above a sector average of 10.39 per cent in February.