Spain's state-owned lender Bankia posted a 10 percent fall in third-quarter net profit on Monday as lending income remained pressured by low interest rates. Spanish banks' reporting season is being partially overshadowed by Catalonia's independence drive and its potential impact on financial markets.
However, Bankia is one of the less affected lenders, with only around 5 percent of its business in Catalonia. Its shares have lost 1 percent since a banned independence referendum on October 1. Like its Spanish competitors, Bankia is struggling to lift earnings from loans in Spain as interest rates hover at historic lows, while increasing competition erodes margins. Seeking to boost its earnings, Bankia agreed in June to acquire smaller lender BMN to create the country's fourth-biggest bank following a quick recovery from its 2012 bailout.
After years of consolidation, the number of lenders in Spain has shrunk to 13 from 55 in 2008 before a housing market bubble burst, triggering an almost five-year economic slump. Net profit for the third quarter came in at 225 million euros, beating the 197 million euro forecast in a Reuters poll. Net interest income, a measure of earnings on loans minus deposit costs, was 472 million euros, down 6.9 percent from a year ago and fell 3.9 percent from the previous quarter.
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