MADRID: Spanish bank CaixaBank said net profits dropped 84 percent in the first quarter on Thursday after it took hefty provisions against potentially soured property assets to comply with government regulation on capital levels.
Net profit fell to 48 million euros ($62.99 million) in the first three months from 302 million euros in the same quarter last year, the newly listed bank said.
CaixaBank, which floated on the stock exchange last year after a government drive forcing regional banks to seek private investors, said it had set aside all the necessary provisions to meet the new capital rules.
The Spanish government passed legislation early this year to force the banking sector to put aside over 50 billion euros of provisions to mop up real estate losses and encourage mergers and cost savings without the help of state funds.
The Bank of Spain on Tuesday approved all Spanish banks' plans to boost capital, saying the lenders had presented a need of capital and provisions of 53.8 billion euros.
CaixBank said it had provisioned for 2.4 billion euros in the first quarter to meet the requirements.
The bank, whose board on Wednesday approved its acquisition of smaller rival Banca Civica, reported a non-performing loans ratio of 5.25 percent at the end of March, up from 4.9 percent at end-December.
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