MADRID: Spanish retail lender Banco Sabadell posted a 22.3 percent drop in first-quarter net profit on Thursday, dragged lower by provisioning against exposure to a sickly property market.
Bad loans rose reached 5.46 percent at end-March, up from 5.01 percent at end-December.
Sabadell said it earmarked 330 million euros for provisions against bad loans, which included capital gains from a debt repurchasing deal carried out in February.
Net interest income -- broadly what a bank earns on loans, less what it pays for deposits -- rose 1.3 percent to 379.1 million euros, beating forecasts for 356.6 million and boosted by asset re-pricing and lower deposit costs.
Core capital stood at 9.73 percent at end-March, well above the Spanish government's new, tougher requirement of 8 percent. Sabadell hiked capital by 410 million euros in February to strengthen its capital ratios.
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