BBVA profits jump due to rise in interest on loans

SPANISH bank BBVA reported a 35 per cent jump in second-quarter profits yesterday, thanks to increased income from loans.<br /><br />Net profit for the three months to the end of June was &euro;1.56bn (&pound;1.35bn), up from &euro;1.16bn in the second quarter of 2008 and ahead of an analysts&rsquo; consensus of &euro;1.3bn.<br /><br />The bank was boosted by an increase in net interest earned on loans, which rose by 27 per cent to &euro;3.59bn, despite lending remaining constant at &euro;335.6bn.<br /><br />Spanish banks have seen their interest income rise despite a slowdown in loan growth, due to low base interest rates and higher charges to new customers.<br /><br />Profits were boosted by a 2.5 per cent cut in costs, achieved via more than 8,400 job cuts &ndash; or 7.5 per cent of headcount &ndash; and the closure of 513 branch offices. Revenue was up 13 per cent in the quarter to &euro;5.49bn.