Bankia quarterly profits slump 80pc on Covid woes

MADRID: Bankia's third-quarter net profits plunged Wednesday after the Spanish lender set aside another 155 million euros to cover the risk of customers defaulting on loans, which have multiplied during the pandemic.

Third-quarter figures showed a net profit of 37 million euros, down 79 percent on the same period last year and well short of the 46 million euros expected by analysts surveyed by financial information service Factset.

Last month, the bank agreed to merge with its biggest rival Caixabank to create Spain's largest domestic lender, transforming the national banking landscape.

In total, the bank said it set aside 465 millions euros in exceptional provisions during the first nine months of the year, a step taken by most European banks to cover themselves against people and firms defaulting on loans due to the economic crisis.

Bankia said it had granted a moratorium on mortgages worth 4.1 billion euros in a move encouraged by the government, which is the bank's largest shareholder.

The state currently holds a 61.8 percent stake in Bankia but after the merger, that will drop to around 16 percent.

Shareholders from both banks are to meet in early December to approve the merger which should be finalised by the end of March.